Donald Trump, the GOP frontrunner and real estate billionaire mogul, continues to be the only presidential candidate talking about the Federal Reserve on a regular basis. And that isn’t saying much.
Speaking in an interview with USA Today on Thursday, Trump warned that a recession could be triggered if the Federal Reserve decides to hike interest rates. He added that the interest rate has been kept so low for so long simply for political reasons, a sentiment echoed by many (SEE: Peter Schiff: Federal Reserve won’t hike interest rates to ensure Democrats win White House).
Trump presented the case that the United States central bank should have already hiked rates from its very low level set during the economic collapse.
“When you raise interest rates, I think a lot of bad things can happen, in terms of recession, everything else,” explained Trump.
Last week, Trump made similar remarks to Bloomberg Television, and suggested “this is a political thing” in regards to artificially suppressing interest rates.
“This is a political thing, keeping these interest rates at this level,” Trump told the news outlet. “Janet Yellen for political reasons is keeping interest rates so low that the next guy or person who takes over as president could have a real problem.”
Stephen Moore, a former Wall Street Journal editor, argued in favor of Trump’s stance. He noted that since Washington doesn’t understand what exactly happened in 2007 and 2008, the powers at be are recreating a situation where there’s another financial bubble.
“If it pops, we could replay the same devastating effects as occurred during the first bubble in 1999 and 2000,” he wrote. “Government and politicians have no learning curve. All of the conditions of financial wreckage are reappearing. This is why congressional Republicans absolutely should put up a fight on the debt ceiling by requiring more budget discipline as a condition of higher debt levels.”
The latest ABC/Washington Post poll shows Trump maintains a 10-point lead over Carson, and an astounding 22-point lead over Florida Senator Marco Rubio. On average, Trump is leading the GOP field by about six points.
The economy is headed for a recession in 2016 even if the FED does nothing with interest rates. The consumer has added billions in debt to their credit cards, car loans and HELO credit and will pull back spending in 2016. The FED will do nothing to upset the apple cart in 2016.