As usual, Trump has his facts all wrong about who has had how many rate cuts and that inflation has miraculously disappeared since January 20th. In fact, if anything, inflation has bottomed at an unsustainably high 3.0% level. Indeed, since March 2023, the annualized monthly change in our trusty 16% trimmed mean CPI has cycled between 2.5% and 4.0% with no indication that a return to the Fed-mandated 2.0% lane is imminent.

But at least this time the Donald is attacking the right target. The truth is, when it comes to verbal assault, you can't drop enough bombs on the Fed or easily avoid the Donald's bottom line conclusion: "We will be paying for his incompetence for many years to come".

Unfortunately, the arrogant monetary mandarins who run the Fed are as unlikely to bend to the Donald's verbal fusillades as the stiff-necked Netanyahu. Still, it is well worth pursuing the opening that the Donald's latest missive provides.

To be sure, he is not remotely correct in suggesting that the Fed should be pegging rates "two to three points" lower. Nor would its failure to push rates back toward the negative yield line in real terms amount to monetary malpractice per his echo chamber in the VP's office.

Then again, JD Vance's sheer ignorance on the economic policy front might well be explained by his misfortune of having taken economics courses at Yale:

"The president has been saying this for a while, but it's even more clear: the refusal by the Fed to cut rates is monetary malpractice."

To the contrary, the real "malpractice" is the fact that the Fed drove rates down into the sub-basement of history, generating negative inflation-adjusted yields for most of the 25-year span since the turn of the century. Yet negative real rates are the devil's workshop of economic distortion and malinvestment. They encourage excessive gambling on Wall Street via the carry trades and unhinged borrowing in Washington owing to the temporary, artificial suppression of the interest cost of the public debt.

And yet, after just a few quarters of real money market interest rates above the flatline, currently posting at just 1.2% after inflation, the Donald and JD are huffing and puffing for a 2-3% cut in nominal rates. Of course, that would push real yields back into negative territory, which most definitely will Make America Broke Again—not usher in the Donald's ballyhooed Golden Age of Prosperity.

Besides, riddle us this JD: How in the world did we get the storied Reagan Boom in the 1980s and 1990s when real money market rates posted in the +2.5% to +5.0% range? That is to say, capitalist prosperity is absolutely not a function of dishonest, cheap money flowing from the printing press of the central bank.