When people are elected to office, one of the many administrative aspects of elected office is appointing people to Boards and Commissions. Ideally, the higher the post the more qualified the person, in as much as they could be either Democrat or Republican and make decisions for the betterment of the country. In an ideal world, most people would not pay much attention, however as the elected world has been more popularized who is appointed and who is not is of concern. In terms of the Federal Reserve, the President has and continues to send tweets about lower interest rates. In the early part of April the federal reserve rate was running at 2.4%. The President believes if the reserve rate was closer to 0% the economy would pick up steam and there would be no threat of either inflation or possible downturn in the economy.
What is telling about the President’s tweets is what interest rates he never talks about – consumer rates and the typical credit card at 18%. The President is only interested in the federal reserve rates and wishes to appoint new governors. According to Reuters, Mr. Cain, formerly the Chief Executive of Godfather’s Pizza previously served on the Kansas City Fed. At 72 and hopefully in good health, and if he wishes to serve, he would be a good choice. The President also wishes to appoint Stephen Moore an economist who believes low interest rates do not cause inflation.
Linking to dividend paying stocks, all investors you want an reasonably stable investment climate. It is difficult to believe investment decisions for your company’s long term future would be dependent on the costs of 1% interest rate versus the costs 2or 3% interest rate, if it is you have better seek alternative investments. Most of the time who elected officials appoint to Boards and Commissions do not matter greatly because the decisions they make could be either political party. When Presidents appoint people just because they agree and will do his point of view, versus what reality tells you, it is time to worry because governments change.
There are more questions than answers, till the next time – to raising questions