YELLEN GIVES THREE CHEERS
‘Trumponomics’s’ has Fed eyeing triple jumpmp in 2017
J ANET
Yellen held a pep rally for President-elect Donald Trump on Wednesday when she reluctantly endorsed his economic plan.
The Fed chiefs under President Obama — Ben Bernanke and Yellen — were only able to raise rates twice in eight years, counting Wednesday’s 0.25 percent hike.
Last week, Yellen shocked Wall Street by saying there could be three rate rises next year.
While the economy has failed to expand meaningfully under President Obama’s economic leadership, clearly the Fed expects a completely different trajectory under a President Trump.
The US economy, as measured by gross domestic product, grew an anemic 1.8 percent for the first three quarters of this year. That means President Obama will go down in history as the only president to oversee eight straight years of sub-3 percent annual GDP growth.
Obama did walk smack into the financial crisis, but at this point, eight years later — with rates essentially at zero for his entire term, plus the $4 trillion in quantitative easing stimulus from the Fed — his second four years should have been far more rewarding for everyday Americans. It clearly wasn’t.
“Trumponomics” gripped average Americans by the seat of their pants and said, “Stand tall, this administration is going to work for you.”
Even beforere taking office or completing his Cabinet nomi-nominees, Trumpp got right to work and cut a deal to keep 1,100 jobs at the Carrier plant in Indiana — justust in time for the holidays.ays.
While someme say it’s small in aggregate size, I say that was a strong messagessage to every American thatat he is looking to cut deals thatat benefit average everyday Americans. me ric ans.
And it wass quite a confidence booster for all Americans. The markets, too,o, have stood tall, with the Dowow Jones industrial average settingting numerous re-record highs sincesince Election Day and it is approaching pp roaching 20,000. The dollar has climbed to a 14year high as well. A strong cur- currency is affirmation ir ma ti on of theun- underlying economic co no mic wave of strength to come.
Main Streetet Americans are thrilled withith the “Trump Bump.” Just look at consumer confidence, which blew away all estimatess earlier in the month, coming in at a score of 98. And last week, the NAHB Housing Market Index notched an 11-1-year high.
Homebuildersders are looking forwardrward to fewer regulations at ions in the mortgagege and lending marketskets to get their custom-ustomers back andd get home ownershiprship up from its de-depressed levels.els.
In August,ust, home owner-ership notchedd the lowestt rate sincee statistics began being reported in 1965. Trump’s economic policy of lower taxes and lighter regulations for all was crafted by none other than economist Larry Kudlow cred working at the Federal Reserve and then helping President Ronald Reagan lead the economy to prosperity after President Jimmy Carter’s term. The similarities of economic shift between the Carter and Reagan administrations and the Obama-to-TrumpT transition is remarkable,able, if nonot outright The Fed has worked under the faux guise of being “data dependent,”depen yet now, dramatically,dra without havinhaving months of data, or eveeven the proposedposed presidentpresidential policy plans, the central bank is looking at a historichisto aboutfaceface in monetary policy. The writing is clearly on the wall. Kudlow is reporeportedly underder consideration for the key spot in Trump’s administra-a tiontion as chairmanchairma of the Council of EconomicEcono Advisers. I have gotten to know him over the years and truthfully can’tcan think of anyone more qualified or more decent personson to navigatenav and lead the economy. TThis plum spspot has bbeen used as a launchining pad for the last three former Fed chairs, , Bernanke and Yellen. Yellen, who is a lolongtime liberal-leaning Democrat, wouldn’t dare say that Trump’s econoeconomic policiescies are far bbetter. Nor would she give an outrightright endorendorsement to his policies of lower taxes and lless regulations. But her actions on WednesdWednesday clearly state ththat Trump’s electioelection just changchanged the Federaleral Reserve’s ccalculus for 22017.