This post War On Savers: 2008-2022 (At Least) appeared first on Daily Reckoning.
The wait is over!
After multiple delays and an unusually public decision process, President Trump has finally made his choice for the next Fed chair position.
The new chairman of the Federal Reserve will be Jerome “Jay” Powell.
The 64 year old is a lawyer and former investment banker who has served on the Federal Reserve Board of Governors since 2011.
Janet Yellen — the mastermind behind the war on savers — will officially be out of office on February 3rd, 2018.
But that doesn’t mean the war is over…
The “war” started at the end of 2008 when the Fed cut interest rates to zero.
Granted they didn’t have much of a choice after the financial crisis. But the war escalated in the following years when officials refused to normalize.
Keeping rates artificially low for going on 10 years now has devastated the retirement accounts of seniors by crippling their ability to earn a decent return on savings.
And this is a trend that looks to continue with Jerome Powell at the helm…
Jerome Powell — “The Republican Yellen”
Jerome Powell is the ideal choice for President Trump.
It’s no secret what Trump’s number one goal is to boost the economy.
And rightfully so! Why else have a billionaire businessman in the White House?
So far he’s been attacking this goal from three different angles — government spending, tax cuts, and now monetary policy.
The first two are pretty straightforward.
Government spending on infrastructure projects like the border wall between the U.S. and Mexico will create jobs and benefit the industrial companies like Caterpillar (NYSE:CAT) and U.S. Steel (NYSE:X).
While decreasing taxes on both individuals and corporations will increase disposable income which will increase demand for goods and services. (This is a topic that we’ll have more on in the next few days.)
These are givens for a president.
After all, fiscal policy is a basic duty of the federal government.
It’s the third angle that is unusual for a president, and one that will hurt retirees the most… Monetary Policy.
It’s no secret that Trump prefers both lower rates and a weaker U.S. dollar.
Both of these benefit U.S. corporations by allowing them to borrow at lower rates and export more goods at attractive prices.
But up until this year, no other president has been able to influence monetary policy in the same way that Trump has.
That’s because Trump currently has the opportunity to appoint more members to the Federal Reserve’s Board of Governors than any president since Woodrow Wilson in 1913 — when the Fed was created.
Powell was just the first of four Fed vacancies filled so far.
To quote Jim Rickards — “Trump will own the Fed… Whatever Trump wants, he will get”
And this is bad news for retirees, because Trump wants to keep rates low, which means Powell is likely to continue Yellen’s “dovish” monetary policies by keeping rates lower for longer.
He’s not called the “Republican Yellen” for nothing!
So at a time when retirees should be benefiting most from compounding returns, they’ll actually …read more
Source:: Daily Reckoning feed
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