Declining Confidence in Trump Economic Management

Real interest rates are declining. Measured economic policy uncertainty is rising.

Figure 1: Ten year constant maturity TIPS, % (blue, left scale), Economic Policy Uncertainty (red, right scale). NBER defined recession dates shaded gray, assumes continues through July.,  Source: Treasury,, accessed 20 July 2020, NBER.

What about the stock market (and the VIX)? This paper suggests that we interpret EPU increases as more associated with Main Street economic uncertainty than Wall Street (represented by VIX) [ungated version here]. The real rate decline is consistent with a belief in more pronounced economic deceleration.



22 thoughts on “Declining Confidence in Trump Economic Management

  1. Moses Herzog

    You ever notice when a Democrat is in the White House we always hear how “savers” and the elderly with savings accounts aren’t getting any interest on their money?? Here we are again, with a Republican in the White House, rates incredibly low, and Pelosi, Schumer etc have nothing to say about low rates. Why do we always see 30-40 Republicans on the cable news hitting Democrat presidents on this, but when the same thing is happening and a Republican is in office, we don’t see so much as two Democrats discussing how low rates hurt savers??

    1. macroduck

      Because criticism of low rates amounts to criticism of the Fed. Mainstream Democrats mostly call the Fed on the carpet for things beyond the Fed’s control, like minority unemployment and housing disparities. Democrats also sometimes condemn the Fed for not taking stronger action against financial villains, when it is lawmakers, presidents, governors and public prosecutors who are mostly to blame. Democrats don’t generally question the Fed’s role in setting monetary policy, at least not to the degree that Republicans do.

      This is part of a pattern in economic policy making of Democrats taking the public interest into account, unlike Republicans.

    2. Willie

      Because Republicans will use even the flimsiest excuse to make an attack and then retreat into their shells when the same thing happens on their watch. The poster child for that kind of thing is Paul Ryan, one of the biggest frauds to have soaked up space in our government.

  2. Moses Herzog

    Sometimes I like to share things on this blog, just because I think they are “good reads”. They may not be “revelatory” or “revealing” of anything new. They are just interesting reading, and we have some regular commenters here that are pretty sharp (I’ll let you guess which ones I include in the “sharp” group and which ones I exclude form the “sharp” group). But anyway, I thought some might find it entertaining reading:

  3. formereconomist

    Are “confidence in economic management” and “uncertainty over what Congress and the Admin will agree to” the same thing? If not, this is an absurd and politically motivated post.

    1. Moses Herzog

      @ formereconomist
      So let’s ask a very simple question here: You’re saying you have confidence in donald trump’s “economic management”?? It’s a “YES or “NO” answer here we’re looking for, then we can all go on about our business. Literally.

      If you can’t manage a “yes” or “no” answer to that question (I’m guessing you’ll go back to your hidey-hole) then maybe you can tell us “YES” or “NO” if you’re very much looking forward to the 2nd quarter GDP numbers at the end of July?? Maybe you’re like “mathematical economist” Barkley Junior and you think the “record” consumption numbers are taking us to economic nirvana??

    2. macroduck

      In a time of extreme economic dislocation in which policy response is critical, yes, they are the same. Anything else I can clear up for you?

    3. Dr. Dysmalist

      I think “confidence in economic management” encompasses much more than ” uncertainty over what Congress and the Admin will agree to.” If the House and Senate strike a deal, they can at least beat Trump & the Sycophants briskly about the head and shoulders until his aides can convince him that the deal is in his best interests as well as the country’s.

      However, no one who has objectively witnessed the stupidity, ignorance, venality, and incompetence which this Administration has displayed in everything they’ve tried to do, and actively not tried to do in the case of the global pandemic, can have any confidence at all that the intent of Congress will be implemented accurately.

      In other words, a deal with Congress is one thing. Effective management of anything by this Administration has been highly uncertain starting, oh, about January 20,2017.

  4. pgl

    TeleTracking gets a $10 million contract to replace the CDC in collecting COVID19 data:

    “TeleTracking has a leading role in the HHS initiative, called HHS Protect, that collects and disseminates key data from the nation’s hospitals specifically for the Covid-19 pandemic.”

    Is this outfit ready to do the job? Of course not. So why is Trump doing this? How much has Teletracking given to Trump’s reelection campaign? Or is Trump just hoping his Pittsburgh buddies will lie for him?

    1. macroduck

      Ten million dollars is probably too little, because the start-up effort needs lots of money thrown at it. The hand-off needs to be seamless, and it can’t be. The only way to reduce loss of function in the early period is to eliminate any budget constraint. Maybe $10 million is enough for routine functioning – I have no idea. It is a paltry sum when standing up a brand new, nationwide data collection function on the fly.

  5. pgl

    Missouri Governor Mike Parson reminds me of Bruce Hall:

    WASHINGTON – Missouri Governor Mike Parson, a Republican, downplayed the risk for children who may contract the coronavirus from classrooms during school reopenings, insisting “they’re going to get over it.” “These kids have got to get back to school,” Parson said in an interview Friday with radio host Marc Cox on KFTK. “They’re at the lowest risk possible. And if they do get COVID-19, which they will — and they will when they go to school — they’re not going to the hospitals. They’re not going to have to sit in doctor’s offices. They’re going to go home and they’re going to get over it.”

    Not all children will just get over it. But even for those who do not have very adverse effects – they will give it to their parents and grandparents who may die from this virus. It is hard to believe any governor could be this incredibly stupid but even as stupid as Parson is, Bruce Hall is worse.

    1. Moses Herzog

      The subtext of all this, is that public schools largely serve the function of not educating our children, but being babysitters and caretakers. And as long as people don’t have a place to “dump” their kids for a few hours, it makes it very difficult to near impossible for them to work. Which means they can’t slave for “the boss man” and give him 90 cents of every dollar’s worth of their labors. Which even after all this time shows you how much power labor would have if they ever had the brains/unity to unionize. Governor Parson’s lobbyists and corporate sponsors don’t have their over-supply of cheap labor, and now they’re getting cranky and crotchety about it. Imagine for a few moments if that was a labor strike. We would THEN find out what the TRUE “minimum wage” for a day’s labor in America is actually worth—i.e. a living wage~~~THAT means you’re not going under water just a little bit more every month, while guys like Bezos make money hand over fist doing magazine profiles making them out to be “God” and screwing around on their wife in hotel rooms.

      But, oh, I digress, carry on with the usual narrative, the “evil liberals” are trying to keep kids out of school.

      What difference does it make anyway?? Republicans like Parsons are siphoning off PUBLIC TAXPAYER MONEY so “private” schools’ (that cannot operate without stealing from the public till) “administrators” can abscond with the money and then cheat public school students of educational resources at the same time they bad-mouth public schools.

  6. The Rage

    Debt ponzi.debt ponzi. Excess capital that needs removed and turned into production. Rates would rise then.

  7. Moses Herzog

    I hope this intelligent young lady will find a new team, that treasures athletes who have a head on their shoulders and not willing to be abused and thrown away by a system which favors old white men collecting paychecks for doing next to nothing in NCAA administrative offices.

    She has my respect. If more black athletes had her courage, the NCAA wouldn’t step on their neck so much.

  8. Alan Goldhammer

    Gold Standard here we come! Judy Shelton just passed the Senate Committee vote on a party line. Unless some Republican Senators show some courage she will be approved for a Fed chair position.

    1. baffling

      you can expect a scorched earth approach to many things between now and when trump is fumigated from the oval office. but let me tell you, payback will be a b!t@h.

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