It’s not a gold standard, but Trump appointing some so-called “hawks” on the Federal Reserve Board of Governors would at least be a step in the right direction. From Tommy Behnke …
Team Trump’s economic advisers paint an even more optimistic picture of his future monetary policy. Some of today’s most reasonable mainstream economic voices are included in his inner circle. These names include David Malpass of Encima Global, who co-signed a letter with Jim Grant opposing the Fed’s “inflationary” and “distortive” quantitative easing program; John Paulson of Paulson & Co., who made billions from shorting the housing market before the Great Recession; Andy Beal, a self-described “libertarian kind of guy” who blames the Fed for the credit crisis; and the Heritage Foundation’s Stephen Moore, who told CSIN in 2012 that he is a “very severe critic” of the Fed’s “incredibly easy-money policies policies of the past decade.”
While none of Trump’s economic advisers are by any means Austrians, they are far more hawkish than most of Presidents Bush and Obama’s past economic advisers. Ian Shepherdson, chief economist at Pantheon Macroeconomics, has even said that these advisers are pushing Trump to nominate two “hard money” candidates to fill the Fed’s current vacancies.
“A core view of many Trump advisors is that the extended period of emergency policy settings has promoted a bubble in the stock market, depressing the incomes of savers, scared the public and encouraged capital misallocation,” Shepherdson told Market Watch. “Right now, these are minority views on the Fed policymaking committee, but Trump appointees are likely to shift the needle.”
The Mike Pence Factor
Trump’s election has given hard money advocates the most hope in over 30 years that our nation’s failed monetary policy will be reformed. Mixed with the current hawkish wave that is already percolating in the veins of some FOMC members, Trump’s future appointments can have a huge impact on the central bank’s immediate decision-making. One can only hope that the president-elect will stick to his guns and do the right thing. Regardless of what he does, however, it will surely be a step ahead of what the Hillary Clinton rubber dove stamp would have brought to the trading desks.
Tommy Behnke currently works for a public relations firm in Washington, D.C. He is the former press assistant for the Rand Paul for President campaign.