After a senior executive from the US Chamber of Commerce spent a full CNBC programming block criticizing the president for "weaponizing tariffs" and putting American business at risk with his petulant trade policies, Donald Trump decided to refute that argument by picking up his White House phone and calling his old pal, human Catholic Charities golf fundraiser Joe Kernen.
The president's call lasted almost half an hour, so a lot of batshit stuff was said, but one thing he blurted out was of particular interest to us and our bemused monitoring of Trump's relationship with his Treasury Secretary and policy eunuch, Steve Mnuchin.
Since the president spent the weekend pretending that he'd cut a last-minute deal with Mexico, he seemed eager to spend Monday morning moving on China trade negotiations in a manner that he himself has been known to characterize as "like a bitch." And any discussion of China negotiations in front of CNBC viewer types inevitably leads our president to one idea...
So here's some fresh diss track work from POTUS on Jay Powell's inability to cut interest back to zero already:
“It’s more than just Jay Powell — we have people on the Fed that really weren’t — they’re not my people. But they certainly didn’t listen to me because they made a big mistake: They raised interest rates far too fast,” Trump told CNBC. “That’s No. 1.”
Okay, Trump still thinks Jay Powell cucked him on monetary policy, a theme so bizarrely constantly made public that it's almost reassuring at this point. But let's parse the rest of that little outburst, with a special focus on "we have people on the Fed that really weren’t — they’re not my people."
Hmm. The Fed Board's current membership stands at five. Four of those members, including Powell himself, are Trump appointees. Stacking The Fed has been one of the Trump administration's most slapstick policy initiatives so we tend to forget that Steve Mnuchin [let's just cut to the chase] has been pretty efficacious in putting Trump-friendly economists in positions of real power.
But Mnooks cannot be thrilled by what his ever-changeable master is saying about these disloyal pricks and their turncoat leader, Jay Powell. Again, our Treasury Secretary remains rather focused on cutting his own taxes and getting financial regulations pared back to the point where he can try yet another career rebirth once he drops this "service" horseshit, but he's also being forced to keep his eye on Trump's temperament towards the Fed. After all, there's a fine line between bullying an independent monetary policy body into considering a rate cut while literally also bragging that the economy is doing amazing, and being such a maniac that The Dow Jones Industrial Average notices how truly emotionally unhinged things have become in the Oval Office.
If the markets start to really tank, that makes Trump sad, and when he's sad he gets angry and suddenly your phone isn't ringing, Kevin Hassett's phone is dead, Larry Kudlow is in the hospital again and Peter Navarro is on the front lawn of the White House yelling into a camera that tariffs on Luxembourg are how angels are born.
If Trump has decided that Richard Clarida, Michelle Bowman, and Randy Quarles are not his people, then Steve Mnuchin better drum up some real Trump people real quick. Should Powell somehow manage to keep rates steady next week, all hell is going to break loose in the president's psyche, a tantrum that will certainly be reflected in the markets now that they're fully addicted to cheap money. Should this happen, we'll almost certainly hear Trump threaten to fire Powell while also musing about how Quarles was really an Obama guy all along.
Packing some more Trumponomic thinkers on the Fed Board should -- in our humblest opinion -- become Mnuchin's main priority until he gets two more confirmed. Any failure to keep this charade going will make it obvious that he's increasingly out of step the White House, and he'll very soon be unable to blame Kudlow for shit. Mnuchin needs like six more months to cement his own future here, he can't fuck this up now...
Maybe he should try Herman Cain again now that he's finally been vetted.