It is September 26, 2017. The FOMC has just announced that it will hike rates to 2.25 percent. The Fed’s interest rate committee foresees strong economic growth for the years coming, unemployment declining even further, as well as subdued inflation. In other words, economic wonderland. According to my view, this was too good to be true, as I have explained earlier along these lines.

Days later, at the beginning of October, the Fed Chief Jerome Powell points out that an interest rate of 2.25

What will your modos operandi be when, as a central bank, you want to expand your discretionary powers to conduct monetary policy that will be ever more harmful to ordinary citizens and has more severe consequences for financial markets, without setting off the public’s alarm bells? First of all, whatever the case, you of course do not admit that your aim is to obtain more discretion.

The U.S. midterm elections are done. The Democrats gained a majority in the House of Representatives, whereas the Republicans gained a majority in the Senate. This implies that Trump will have more trouble in introducing new legislation (another tax hike will be close to impossible, for instance), but will probably make it to the end of his term. Moreover, Trump can quite easily propose new Federal Reserve board members and Supreme Court judges; whereas Trump can propose candidates to fill vacant positions, they must later be confirmed by the (Republican-colored) Senate. It remains to be seen how many trade tariffs Trump can justify without passing them through Congress, through executive orders, but he might have some discretional power to impose, especially upon China, additional