Trump's Fed feud roils markets, republicans alarms

President Trump Donald John TrumpBipartisan Lawmakers Urges Air Force Secretary for Top Defense Position Austin Couple Place Baby Jesus in "ICE Cage" to Protect Trump Immigration Policy Woman White House correspondent: "I have never seen so many moms" in briefing room as during the Trump Presidency MORE s intensifying attack on the Federal Reserve Chairman Jerome Powell has a destabilizing effect on financial markets and rattling Republican lawmakers.

Trump's criticism of the central bank's chief policeman kicked into high equipment Monday, not long after the state secretary Steven Mnuchin Steven Terner MnuchinMnuchin tries to secure markets after closure. Washington Mnuchin: Trump thinks he doesn't have the power to fire. Fed boss Speaking for human rights in the debate on Saudi affairs MORE tried to reassure the markets by insisting Trump has no intention of shooting Powell.

Trump has undercut it cl The goal is to blame the Fed for market volatility and recent economic accidents.

The Dow Jones Industrial Average died 653 points on Monday's worst day before Christmas power in history when Trump renewed his assault on the Fed to raise interest rates last week. S & P entered a bear market, and is now down more than 20 percent from August's peak.

Economic experts say that Trump has a destabilizing effect on markets, and GOP legislators have announced that he needs to step more closely in his public comments on the Fed, an independent institution.

Vin Weber, a former financial advisor to Mitt Romney Willard Mitt RomneyFive possible successors to Mattis Hills morning report – Congress readies spending until 2019 Ryan focuses on heritage as a talk of closure dominating the capital MORE s Presidential campaign in 2012, warned against taking drastic measures, says shooting Powell would provoke a "very bad" reaction.

"People, regardless of their views on monetary policy, would see it as an attack on the Fed's independence and it would create confidence significantly," he said Monday.

Trump's attempt to influence monetary policy, Weber says, probably Ire because they just want to make Fed work harder as it tries to maintain its credibility and independence.

"The president creates an impossible situation for the Fed because someone appointed to the Fed Board must have among their priorities preserving the Fed's independence," he said. "Everyone would be really rattled if they thought the Fed didn't act as an independent institution."

"So when the president is so vocal in criticizing the Fed, he almost forces them to prove their independence by going against him or making a very public show not to do what he wants, Weber said.

Axel Note, president and chief investment of Merk Investments, a company based in Palo Alto, California, says that Trump will owe the Fed what Goldman Sachs and the JPMorgan Chase project is a financial downturn in 2019, just before his re-election.

"That There is no way for the Fed to "win" this, "said the Note." The Fed will be blamed for a market that is settling down or for a recession. Trump needs a fall and Powell at the Fed is perfect for that. "

Trump has often bragged about the stock market's strong performance in 2017, but has mentioned the markets more often this year as they have missed the high expectations set by Republicans passing tax reform a year ago.

Mnuchin tried to calm markets this weekend by getting rid of Trump admitting he doesn't have the power to burn Powell, but the lack of a similar statement from the president left that insurance company

. Trump then went on the attack. Monday tweeted: "The only problem our economy have, is the Fed. "

" They have no sense for the market, they do not understand the needed Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders. The Fed is like a powerful golfer who can't score because he has nothing to touch – he can't putt! "President tweeted.

Mark Zandi, chief economist at Moody's Analytics, warns Monday that Trump's war with the Fed is shocking the stock market.

" Investors are increasingly spooked by the president's mistaken attacks on the Fed and Treasury Secretary & # 39 ; s ham-handed effort to convince all Trump does not mean it, and that everything is fine, "he told The Hill.

" Trump's trade war, his cavalry's will to close the government and his broad sides to the Fed's independence is too much for investors to carry, "said Zandi." Trump's flawed economic policy already had stock investors looking for the door, but given the political chaos he creates, they are now going through it. "

Republican lawmakers want Trump to ease his criticism of the Fed.

Sen. Pat Toomey Patrick (Pat) Joseph Toomey Supreme Defense: Pick for South Korean social divisions with Trump's nuclear threat | McCain-blaster moves to suspend Korean military honor exercises | White House defender Trump salute of North Korean general WH backpedals on Trump's "due process" remark on weapons Top GOP candidate drops out of Ohio Senate race MORE (R-Pa.) On Sunday, Trump's comments called "unlucky" and he defended Powell, confirmed by the Senate in January in an 84-13 vote, is one of the broadest margins of a Trump nominee.

"Chairman Powell will not let politics interfere with his decision-making process. I create the belief that we owe him a gratitude," he says, praising the Fed Mayor for putting monetary policy on the path to normality.

Former Senate Bank Chairman ] Richard Shelby Richard Craig ShelbyMnuchin is trying to make sure markets after shutdown are quiet. Washington Lawmakers shrug by shutdown drama. GOP discord on the wall extends the closing battle MORE (R-Ala.) Saturday warned against giving Powell.

"I would be very careful about it," he said. "The Federal Reserve is set up to be independent."

Lawmakers are cautious that Trump makes another unexpected high-profile personnel decision after he dumped departure for outgoing defense secretary James Mattis James Norman MattisBipartisan lawmakers urge air defense secretary top defense position defense ministry sign executive order to pull Syria's Bloomberg troops blast Trump as "reckless emotional and meaningless chaotic" more until the end of the year, instead of late February as Mattis initially announced.

On Wednesday, Powell made a point of saying that Trump's pressure has had no effect on Fed policy.

"Political considerations have not played a role in the discussion or monetary policy decisions," he told reporters after the Fed announced a quarter-point increase, the central bank's fourth rate hike in the year. "We have the independence, which we believe is important in order to do our job in a non-political way."

"We at the Fed are totally concerned about this mission, and nothing will deter us from doing what we think is the right thing to do," he added.

These comments asked Trump to discuss shooting Powell, according to Bloomberg and CNN, even though experts are mixed on whether he is authorized to reject a Fed leader.

Matt Stoller, a fellow at the Open Markets Institute, tweeted on Saturday that Trump could burn Fed directors to hold bank stocks in index funds according to Section 10 of the Federal Reserve Act.

Other financial experts have argued that the law allows a president to remove a Fed mayor "for cause."

Mnuchin attempted to throw out that speculation this weekend by tweeting that Trump told him that while disagreeing with the Fed policy confirmed that he had no right to remove him.

This reassurance failed to ward off a stock market route on Monday, giving democratic ammunition in their fight against border wall funding, leaving some federal departments and agencies closing down over Christmas.

"It's Christmas Eve and President Trump plagues the country into chaos," Senate Democratic leader Charles Schumer Charles (Chuck) Ellis SchumerWith House, lawmakers signal shutdown will go on Shutdown is bad for Republicans, an opportunity for Democrat's house disappears without clear path to prevent closure MORE (NY) and House Democratic Leader Nancy Pelosi Nancy Patricia D & # 39; Alesandro PelosiWith House, lawmakers signal shutdown will go on Shutdown is bad for Republicans , an opportunity for Democrats Mulvaney: "Very possible" closure will enter the new Congress MER (Calif.) said in a joint statement. "The stock market is refueling and the president is performing a personal war on the Federal Reserve – after just kicking the defense minister."