Four months ago, Donald Trump said he's "not a person that thinks [Federal Reserve Chair] Janet Yellen is doing a bad job" since he himself is a "low interest rate person." So, of course, at the debate on Monday, he accused Yellen of "being more political than Secretary Clinton" by "keeping the interest rates at this level."
Now, at this point, it'd almost be more newsworthy if Trump wasn't contradicting himself. About the only thing he has been consistent about is our alleged need for better trade deals. Everything else seems to be, well, negotiable.
Still, it is worth pointing out that Trump's latest attack on the Fed doesn't even make sense on its own terms. Trump, you see, thinks we're in a "big, fat, ugly bubble" that is "going to come crashing down" the second we "raise interest rates even a little bit." Which is why he thinks the Fed should ... raise interest rates? Huh?
If raising rates is going to send unemployment shooting up and inflation down even further below its 2 percent target, then why would the Fed raise rates? Its job is to keep both of those in the Goldilocks zone where they're low, but not so low that the economy spirals out of control. According to Trump, it sounds like the only way to do that is to keep interest rates where they are.
That hasn't stopped him, though, from accusing the Fed of being in President Obama's pocket. "The day Obama goes off," Trump said, "and goes out to the golf course for the rest of his life to play golf, when they raise interest rates, you're going to see some very bad things happen, because the Fed is not doing their job." Instead, he thinks it's "doing political things."
There's no evidence of this, because it isn't true. The reason the Fed isn't raising rates right now is that it doesn't think the economy warrants raising rates. Inflation, after all, is still well below its 2 percent target. And despite what Trump says, it doesn't look like we're in a bubble either. Sure, stock prices are pretty high by historical standards, but household debt burdens aren't going up at all. Maybe the best way, though, to tell that the Fed is doing what it should is that every other central bank is doing it too.
Interest rates are basically zero (if not lower) in the Eurozone, England, Canada, Czech Republic, Denmark, Norway, Sweden, Switzerland, Israel, and Japan. Are all of them in the conspiracy to help Obama? Or is it that the worst financial crisis since the 1930s has made it so that even eight years later the global economy needs zero interest rates to grow?
Even Trump knows the answer to that question. You just had to ask him four months ago.