Donald Trump is insisting that the Fed drop the overnight interest rate by a full percentage point, something that is rarely done even in a poor economy. If it moves, it usually moves by 1/4 point or 1/2 point. Trump says it will stimulate the economy even more.
He was so angry on Friday when Fed Chairman Jerome Powell didn't announce another rate cut that he questioned whether Powell was a bigger enemy than China. Either nobody on his staff told him or they did but he didn't listen, but Powell was speaking at a conference - and the Fed doesn't announce rate changes at conferences and Powell doesn't unilaterally decide what those changes should be. They only announce them after a formal board meeting where the board votes on the change. Another example of Trump not understanding how our government works.
So why is Trump (who appointed Powell to the position) so upset that the Fed - an independent agency - is not doing what he wants them to do immediately?
The Washington Post is now reporting that Trump has four mortgages with Deutsche Bank totaling about $350 million for hotels in DC and Chicago, and for his Doral golf resort in FL. The mortgages are all variable rate, not fixed. Fixed mortgage rates are tied to the 10 or 30-year long bonds, which are not directly affected by Fed rate cuts.
Variable interest rate mortgages, however, move up or down with the Fed's overnight rate, so if the overnight rate is lower from one month to the next, you pay less interest.
See where this is going? And Richie, before you reject my sources as "fake news", this is all publicly available information.
WAPO estimates that Trump would stand to save millions in interest payments on these mortgages if the Fed does what he is trying to bully them into doing. Bloomberg News estimated that Trump would save at least $3 million annually on the four loans if the Fed dropped the overnight rate by the full point he is demanding.
$3 million annually in savings personally for POTUS, directly tied to the very public pressure he is putting on a government agency. Another attempted abuse of power by POTUS for personal gain.
It's not "Make America Great Again" - it's "Make Trump Solvent Again".
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