Trump ready to take control of the Federal Reserve

In the second quarter of 2018, non-seasonally adjusted (M2) money supply growth was zero. That's right, the money supply has not increased at all. That's because the Fed is reducing its balance sheet by $ 50 billion a month. In addition, the Fed has raised interest rates seven times since the fourth quarter of 2015. It is badumed that there will be five more rate increases.

This is the strictest monetary policy since Paul Volcker led the institution in the mid-1980s. It will be remembered that his policies led to consecutive recessions. The current monetary policy of the Fed is directly in conflict with the economic objectives of the president

In addition, the Treasury estimates that it will pay 415 billion dollars of interest on the federal debt during this exercise financial. A better estimate could be $ 450 billion if rates continue to rise. There are many bridges and tunnels and jobs that could be created with this money.

Then there is inflation. It is likely to rise if the Fed softens its policies. If this happens, paying off the federal debt becomes easier. On a less desirable note, higher interest rates reduce property values. Lower rates that boost inflation increase the value of real estate.