from Bloomberg:
Of all the holiday gatherings Jerome Powell gets invited to, a sit-down in the Oval Office might be one of the last he’d want to attend.
Just days after President Donald Trump blamed the Federal Reserve chairman for the stock market’s December swoon and discussed with aides his desire to fire him, White House staff are reportedly working to set up a meeting between the two men.
While some Fed watchers said such a confab could ease tensions, most warned it might be a minefield for Powell, either creating the impression the Fed is giving in to presidential pressure, or simply generating confusion over what gets discussed.
“This is a very dangerous meeting,” said Mark Spindel, the head of Potomac River Capital, a Washington investment fund.
Coming amid a massive market selloff and soon after a bevy of attacks on Powell from Trump, a meeting might only put the Fed in an even tougher spot, Spindel said. “Could I imagine a kiss and make up in the Rose Garden? Yes,” he said. But the president could also “offer his own read-out of what happens,” as he has after other meetings.
Donald Kohn, a former Fed vice chairman under Ben Bernanke, agreed a meeting would carry plenty of peril for Powell.
“The downside is not the meeting itself, but what happens afterwards,” said Kohn, a senior fellow at the Brookings Institution in Washington. “The risk is that the president interprets what he hears and then repeats something publicly that is not entirely consistent with what the chair wanted to convey,” he said.
With nine rate hikes in three years, the Fed is trying to balance the risks of moving too fast and squelching the U.S. expansion and moving too slowly, allowing the economy or financial markets to overheat. Trump has railed against rate hikes since July because inflation is tame. His ire hit a new level after the Fed hiked for a fourth time this year on Dec. 19, a move that further depressed an already sliding stock market.
www.bnnbloomberg.ca/powell-has-lot-to-lose-and-little-to-gain-in-sit-down-with-trump-1.1188526