Remember when former New York Federal Reserve chairman wrote a column in Bloomberg urging Jay Powell to stop being such a monetary policy cuck boy and punch back at his bully, the literal President?

Yeah, it was hilarious.

Anyway, Big Billy Dudley would like to clarify what he meant. And by "clarify" we mean "walk that shit alllllll the way back."

My Bloomberg Opinion article from last week, titled “The Fed Shouldn’t Enable Donald Trump,” elicited an intense and often critical reaction. To provide context and address any misunderstanding, I believe some further explanation is warranted. Here are answers to what I see as the most relevant questions.

Dudley goes on to take the column back piece by piece but the best clarification is the one that should come with air quotes and wink emojis.

Q. How do you reconcile that with what you wrote: “Fed officials should consider how their decisions will affect the political outcome in 2020.”

A. I think central bankers should be aware of all the factors that affect the economic outlook. What the Fed does or doesn’t do can influence electoral outcomes, which in turn can have consequences for the economy and for monetary policy. But the Fed should never be motivated by political considerations or deliberately set monetary policy with the goal of influencing an election.

Yeah, Bill Dudley thinks the Fed should neeeeeeever get political, like ever. Because why would it want to fuck with Trump?

In my view, President Trump’s persistent attacks on the Fed have politicized the central bank. People now wonder whether the president’s attacks are influencing the Fed’s decisions. For example, if the Fed eases monetary policy further at its upcoming September policy-making meeting, people are likely to wonder about the motivation. Is it concern about the economic outlook, or the president’s attacks on the Fed? 


What I Meant When I Said ‘Don’t Enable Trump’ [Bloomberg]