One of the major areas of concern for Republicans after the midterms should be their dismal performance with the voters over 50, whose support was key to his upset of Hillary Clinton. But those older voters are acutely aware of the market’s highs and lows as they are more likely to invest in the market, to already be living off of it or relying on it in the near future. If they think Trump is bad for the market, they may conclude he’s bad for them.
President Trump is also going to try and make the Federal Reserve the boogeyman. Rising interest rates certainly have a lot more to do with market performance than John Kelly’s departure. But the threat that he would try to fire Fed Chairman Jay Powell—whom he appointed—is destabilizing in itself. Acting White House Chief of Staff Mick Mulvaney and Secretary Mnuchin had to try and calm investor nerves on that point, but jeopardizing the independence of the Fed would also cause more disruption. And anyway, most Americans don’t know who Jay Powell is.
Trump’s chief economic adviser Larry Kudlow once said: “I have long believed that stock markets are the best barometer of the health, wealth and security of a nation.” He must know that today’s stock-market message is not favorable for the president and should advise his boss to calm down, project stability for a few months if possible, and let congressional Republicans focus on a true middle-class economic agenda, rather than defending his ill-advised impulses.
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