Stanley Druckenmiller gives Biden’s economic policies an ‘F,’ blames the Fed for reigniting inflation

Reckless
government
spending
enabled
by
the
Federal
Reserve
is
hurting
average
Americans
and
endangering
President
Joe
Biden’s
chances
at
getting
reelected,
billionaire
investor
Stanley
Druckenmiller
said
Tuesday.

The
head
of
Duquesne
Family
Office
who
made
his
name
betting
against
the
British
pound
in
the
early
1990s
blasted
fiscal
and
monetary
authorities,
including
Treasury
Secretary

Janet
Yellen
and
Fed
Chair

Jerome
Powell.

In
addition,
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
does
seem
to
be
a
lot
more
recognition
…
of
the
fiscal
situation
facing
us.
Everybody
seems
to
get
it
but
Yellen,
who
just
keeps
spending
and
spending,”
Druckenmiller
said. “I
think
it’s
dumb
politically,
because
it’s
causing
inflation
and
it
doesn’t
take
a
genius
to
figure
out
that
the
average
American
is
getting
hurt
by
the
inflation.”

Druckenmiller’s
comments
come
with
the
Fed
still
trying
to
bring
inflation
down,
as
policymakers
have

dashed
investors’
hopes
for
aggressive
interest
rate
cuts
this
year.

Getting
markets
enthused
about
rate
reductions
was
a
mistake
because
it
set
financial
conditions “on
fire,”
he
said.

“It
seemed
to
me
the
Fed
was
in
a
perfect
position.
Inflation
was
coming
down,
financial
conditions
were
tightening,”
he
said. “To
some
extent,
I
feel
like
they
fumbled
on
the
five
yard
line.”

Though
Druckenmiller
said
his
firm
was “a
major
beneficiary”
of
the
jump
in
asset
prices
and
easing
conditions,
he
still
thinks
the
Fed’s
pivot
in
late
2023
to
push
harder
on
the
idea
that
rate
cuts
were
coming
was
a
mistake.
The
Fed
at
that
point
only
upped
its
unofficial
forecast
from
two
to
three
cuts,
but
investors
interpreted
comments
from
Powell
in
December
to
mean
that
a
substantial
policy
easing
was
ahead.

Though
low
interest
rates
are
generally
welcomed
by
elected
officials,
Druckenmiller
said
Powell
didn’t
do
Biden
any
favors.

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

“Bidenomics,
If
I
was
a
professor,
I’d
give
him
an ‘F,'”
Druckenmiller
said. “Basically,
they
misdiagnosed
Covid
and
thought
[the
economy]
was
going
into
a
depression.
The
Fed
did,
too.”

“Treasury
is
still
acting
like
we’re
in
a
depression,”
he
added. “They’ve
spent
and
spent
and
spent,
and
my
new
fear
now
is
that
spending
and
the
resulting
interest
rates
on
the
debt
that’s
been
created
are
going
to
crowd
out
some
of
the
innovation
that
otherwise
would
have
taken
place.”

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

Though
he
criticized
Biden,
he
didn’t
have
much
good
to
say
about
Trump,
who
he
said
was
likely
to
see
inflation
under
his
presidency
as
well.

During
his
time
in
office,
Trump
was
a
fierce
Fed
critic
and
repeatedly

hectored
Powell
and
his
colleagues
to
lower
interest
rates.
In
addition,
Trump
advocated
heavy
tariffs
and
has
indicated
he
would
do
so
again
if
he
wins
in
November.

“With
Biden,
I’m
more
worried
about
stagflation,
with
all
the
government
spending,
with
all
the
tricks
that
Yellen
has
been
using
to
manipulate
yield
curve,
with
the
way
the
Fed
seems
to
have
reignited
financial
conditions.
I
think
the
inflationary
outcome
could
be
there,”
Druckenmiller
said. “But
I
also
fear
regulation
and
everything
else
preventing
productivity.”

“So,
I’m
basically
a
guy
without
a
candidate,”
he
added. “I’m
an
old-style
Reagan,
free
markets,
pro-immigration
and
anti-tariff
Republican.”