No wonder Trump is screaming at the Wall St. Journal nearly every day. It is interfering with his fantasies:
The Federal Reserve’s first set of projections since Donald Trump’s inauguration underscored—in the central bank’s understated and technocratic fashion—just how much the president’s plans to press ahead with widespread tariffs have turned the economic outlook on its head.
Months ago, policymakers presumed they would spend 2025 gradually cutting rates to keep inflation heading down without a big rise in joblessness to achieve the so-called soft landing. The latest projections point to the prospect that tariffs covering a swath of goods and materials will send up prices while sapping investment, sentiment and growth, at least in the short run.
“We now have inflation coming in from an exogenous source, but the underlying inflationary picture before that was basically 2½% inflation, 2% growth and 4% unemployment,” said Fed Chair Jerome Powell on Wednesday.
Officials projected weaker growth, higher unemployment and higher inflation than they had anticipated in December. Moreover, nearly all officials judged that if their forecasts were to be proven wrong, it would be in the direction of even softer growth, more joblessness and firmer price growth.
Everyone on Wall St and all the CEOs know that these tariff threats are ridiculous , that the DOGE cuts are chaotic and destructive, not to mention that foreign relations are as unstable as they’ve been in modern memory. But most of them are going along with it and I’m starting to believe they’ve bought into the “Magical Trump” theory: he beat all the odds despite being a criminal moron slathered in orange make-up with the personality of a used car salesman which means he must be doing something right. So they’ve discarded reality to join the MAGA delusion.
The Fed doesn’t seem to have bought into that. Maybe they will eventually. More likely Trump is going to fire Powell or, at the very least, replace him with a flunky when his term is up next year. But in the meantime, reality still exists in one corner of our official society.