Jay Powell & co. are meeting today and tomorrow to decide what the Fed funds rate ought to be. Everyone knows that they’re gonna cut it a quarter percent to 1.75%-2%. So guess what repo rates, which are supposed to track the above, did today?

Bids in the fed-funds market on Tuesday morning reached as high as 5%, according to traders, well beyond the central bank’s target range, which is 2% to 2.25%....

Scott Skyrm, a repo trader at Curvature Securities LLC, said he had seen cash trade in the repo rate as high as 9.25% Tuesday.

“It’s just crazy that rates could go so high so easily,” he said.

Seriously, you guys, this is just cruel. Jay Powell does not have the emotional energy to both pour $53 billion into the banking system and mentally prepare himself for the abusive tweet storm emanating from the White House blasting him for not cutting rates by eleventy jillion points because Saudi Arabia’s oil supply was disrupted for a few hours or whatever. The man was already reeling from spitting up his coffee yesterday reading this tripe from his potential future colleague.

The Full Employment and Balanced Growth Act of 1978, also known as the Humphrey-Hawkins Act, is the other major law that has shaped the Federal Reserve’s role. It imposed on the Fed an obligation to pursue specific economic goals in the best interests of the nation. But contrary to the notion that the Fed should stand aloof as an independent agency, the intention of the 1978 law was to harness monetary policy to achieve the enumerated goals through “better integration” of economic policy-making within the federal government….

Humphrey-Hawkins was particularly insightful—even prescient—in calling for improved coordination of U.S. economic policy to address “foreign competition in the United States and abroad” and to ensure “the ability of our economy to compete successfully in international markets….”

It would be in keeping with its historical mandate if the Fed were to pursue a more coordinated relationship with both Congress and the president.

Wait: There’s a punchline, even though Powell is probably too beaten down to find it terribly funny:

The Humphrey-Hawkins Act quietly expired in 2000….

Fed Steps Into Repo Market to Control Soaring Rates [WSJ]
Trump Urges ‘Big’ Rate Cut as Fed Faces Challenges [NYT]
Trump Again Pressures the Federal Reserve in Wake of Saudi Attacks [WSJ]
The Fed’s Mandate Is Up to Congress and the President [WSJ]