As with any good reality show, there are a range of competitors. There are the kind of right-leaning economists you might expect a normal Republican president to favor. There’s the longshot Minnesota school of Neel Kashkari and Narayana Kocherlakota battling over who can offer the most accommodative possible monetary policy to MAGA. There’s Gary Cohn himself, obviously. And then there’s the incumbent, who has apparently been rising in the president’s esteem.
Fed officials said they would increase their benchmark federal-funds rate on Thursday by a quarter percentage point to a range between 1% and 1.25% and penciled in one more increase later this year if the economy performs in line with their forecast.
Officials also revealed plans for winding down their holdings of Treasury and mortgage securities.
The damage to Yellen’s candidacy can’t quite be gauged yet, since the president apparently has not yet had a 128-character thought about this afternoon’s rise. But we’re going to go ahead and guess that Yellen’s next rate increase will be her last.
“The plan is one that is conscientiously intended to avoid creating market strains and to allow the market to adjust to a very gradual and predictable plan,” Ms. Yellen said at a news conference on Wednesday.
Predictable plan? We can’t think of a single thing that’s more anathema to the current occupant of 1600 Pennsylvania Avenue.