Fed Adopts New Rate-Setting Method: Whatever Trump Doesn't Want
Officials say the policy removes guesswork, since the president's stated preference now doubles as the opposite of the outcome.
The central bank confirmed Thursday that future interest rate decisions will be determined by a simple rule: identify the president's preferred move, then do the other one.
A spokesperson described the new framework as "efficient," noting that policy meetings can now be shortened to the time it takes to read the president's social media posts and reverse them. "We came together as one board, contrarian," the spokesperson said, before excusing themselves to attend a subcommittee on further contradictions.
Under the new system, if the president calls for a cut, rates rise. If he calls for a hike, rates would presumably fall, though officials admitted this scenario has never been tested and may require a subcommittee of its own.
Economists inside the building reportedly welcomed the clarity, saying the old method of weighing employment data, inflation trends, and global conditions was needlessly complicated compared to simply waiting for a single opinion and inverting it.
Asked whether the policy could ever change, the spokesperson said the board would consider it, then immediately voted unanimously not to.