With 2019 soon to be in the books and the last Federal Open Market Committee meeting behind us, it’s a good idea (and not too presumptuous) to give the Federal Reserve a report card.

Clearly, this year the Fed got it right. The policymakers working inside the Marriner S. Eccles Federal Reserve Board Building in Washington, D.C., realized that they had hiked rates in error in 2018 because the world’s economic expansion was indeed slowing appreciably. It was the exactly wrong thing to do, and even doing nothing would have been better. Don’t expect a forthright admission of this from the Fed, which prefers to crow how it got things right this year. So this year the Fed gets an A, but last year was an F grade.

I don’t know the minds of the policymakers inside the Fed, but they surely didn’t want to be seen caving into the Donald, who was railing for lower rates. Right he was, but the president, by making it so public, put the central bank in a bad spot. No one wants to lose face.

The bank dragged its feet in cutting rates, and in doing so, according to the Wall Street Journal, is receiving some criticisms from a number of quarters that echo Trump’s harangues. “…Critics in Congress, Wall Street and within its own ranks accused it of courting inflation, debasi...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free