'Things just got awkward!' Analyst spots alarming 'contrast' between Trump and Fed chief
Political analyst David Pakman said things "just got really awkward" for President Donald Trump after his hand-picked Federal Reserve chairman voted to raise interest rates.
In a Thursday episode of "The David Pakman Show," Pakman argued the rate hike laid bare an alarming "contrast" between Trump and Federal Reserve Chairman Kevin Warsh.
Pakman explained that Trump hired Warsh specifically to lower rates, but the Fed "unanimously decided" to do the opposite and raise its benchmark by a quarter point.
"We are raising rates, and it's coming at really an inconvenient moment for Donald Trump," Pakman said. "We are around 50 days, fewer than 50 days, from the midterm elections."
He said the timing stings because "cost of living is arguably the biggest concern for American voters, and all of the promises about cost of living from this administration have failed to materialize."
Trump spent years attacking former chairman Jerome Powell and "demanding lower interest rates," Pakman said. Trump replaced Powell with Warsh on the assumption that "this guy is going to do the right thing. He's going to lower rates," Pakman explained. Instead, Warsh made the case that inflation remains stubbornly high.
"The plain fact is that inflation is too high and has been for too long," Warsh said. "This summer's inflation readings do not tell me that underlying trends have meaningfully improved."
Asked directly about the president, Warsh brushed the question aside.
"What is your message here to President Trump, who has repeatedly called to cut interest rates, not raise them?" a reporter asked.
"I've got nothing for you...on a discussion with the president," Warsh replied after laughing, Pakman pointed out.
Pakman framed the standoff as "institutional tension." Presidents can complain and appoint governors, but "the whole point of the Federal Reserve is that monetary policy is dictated by economic indicators, not what a president wants," Pakman said.
"We have a real contrast here," Pakman said. "Donald Trump, operating politically and wanting lower rates because he thinks it will boost the stock market, and his own Federal Reserve chairman is saying we have to look at the indicators and do what is right."