Stanley Druckenmiller gives Biden’s economic policies an ‘F’ and blames the Fed for reigniting inflation – NBC 6 South Florida

• Billionaire investors Stanley Druckenmiller have accused fiscal and monetary authorities, including Treasury Secretary Janet Yellen and Fed Chair Jerome Powell, of causing high inflation.
• “Bidenomics, if I were a professor, I would give him an ‘F,’” Druckenmiller said, also calling himself a “man without a candidate” because he thinks a Donald Trump presidency would also fuel inflation.
• “To some extent, I feel like they’ve been messing around on the five-yard line,” he said of the Fed.

Reckless government spending enabled by the Federal Reserve is hurting average Americans and jeopardizing President Joe Biden’s re-election chances, billionaire investor Stanley Druckenmiller said Tuesday.

The head of the Duquesne Family Office, who made his name betting against the British, criticized fiscal and monetary authorities, including the Treasury Secretary, in the early 1990s. Janet Jellen and Fed chairman Jerome Powell.

Moreover, he called ‘Bidenomics’ a failure and said consumers are paying the price in terms of higher inflation. Druckenmiller made the comments during an appearance on CNBC’s “Squawk Box.”

“There seems to be a lot more recognition … of the budget situation we’re facing. Everyone seems to understand it, except Yellen, who just keeps spending and spending,” Druckenmiller said. “I think it’s politically stupid because it causes inflation and it doesn’t take a genius to understand that inflation is hurting the average American.”

Druckenmiller’s comments come as the Fed continues to try to curb inflation as policymakers dashed investors’ hopes for aggressive rate cuts this year.

It was a mistake to get markets excited about rate cuts because it “set financial conditions on fire,” he said.

“It seemed to me that the Fed was in a perfect position. Inflation fell and financial conditions tightened,” he said. “To some extent I feel like they’ve fiddled with the five-yard line.”

The Fed’s fault

Although Druckenmiller said his company was “a big beneficiary” of the rise in asset prices and easing conditions, he still thinks the Fed’s shift in late 2023 to push harder on the idea that rate cuts were coming could be a was a mistake. The Fed only raised its unofficial forecast at the time from two to three cuts, but investors interpreted Powell’s comments in December as a sign that substantial policy easing was in store.

While low interest rates are generally welcomed by elected officials, Druckenmiller said Powell has not done Biden any favors.

Biden is locked in a fierce battle with former President Donald Trump heading into the November elections.

“Bidenomics, if I were a professor, I would give him an ‘F,’” Druckenmiller said. ‘In fact they misdiagnosed Covid and thought the economy was heading into a depression. So did the Fed.”

“The Treasury Department is still behaving as if we are in a depression,” he added. “They have spent and spent and spent, and my new fear now is that the spending and the resulting interest rates on the debt created will crowd out some of the innovation that would otherwise have occurred.”

To be fair, the beginning of the pandemic occurred under the Trump administration, which signed the $2.3 trillion coronavirus relief package into law in 2020. Biden then signed another relief package worth nearly $2 trillion in 2021.

While he criticized Biden, he didn’t have much good to say about Trump, who he said would also likely see inflation under his presidency.

During his time in office, Trump was a fierce Fed critic and repeatedly urged Powell and his colleagues to cut rates. Moreover, Trump has advocated heavy tariffs and has indicated he would do so again if he wins in November.

“With Biden, I’m more concerned about the stagflation, about all the government spending, about all the tricks Yellen has used to manipulate the yield curve, about the way the Fed seems to have reignited financial conditions. Be there,” Druckenmiller said. “But I’m also afraid of regulations and anything else that gets in the way of productivity.”

“So I’m basically a man without a candidate,” he added. “I’m an old-fashioned Reagan, free-market, pro-immigration, anti-tariff Republican.”