President Trump Donald John TrumpBiden on Trump's refusal to commit to peaceful transfer of power: 'What country are we in?' Romney: 'Unthinkable and unacceptable' to not commit to peaceful transition of power Two Louisville police officers shot amid Breonna Taylor grand jury protests MORE took aim at the Federal Reserve on Tuesday morning, a move that skeptics said betrayed nervousness about the political dangers of a slowing economy and declining stock market.

The president complained that the Fed should avoid making “yet another mistake,” asserting that its board should read a Wall Street Journal editorial which called for a pause in hiking interest rates.

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Fed watchers expect the central bank to raise interest rates on Wednesday for a fourth time this year.

Trump also asserted that the Fed should “feel the market, don’t just go by meaningless numbers,” a phrase that drew some mockery from economists, media figures and Trump critics on social media.

White House press secretary Sarah Huckabee Sanders defended Trump’s Fed criticism during a rare media briefing early Tuesday afternoon, telling reporters that “the president is stating his opinion, which he is perfectly within his right to do.”

But beyond the debate over that particular tweet, and others in the past that have hit the Fed, the big question is the political peril posed to Trump.

“You live by the economy, you die by the economy,” one GOP operative who worked on the 2018 midterm elections told The Hill. This person also said that if the economy continued to slow, it would endanger Trump’s chances of winning a second term in 2020.

“This is a serious problem for the reelect,” the source said.

The Dow Jones Industrial Average has now fallen more than 3,000 points, or about 12 percent, from its early October peak. The broader-based S&P 500 has fallen by about the same percentage, while the tech-heavy Nasdaq composite has fallen even more, by roughly 17 percent.

Beyond the stock market, most economists expect the rate of gross domestic product growth to begin to slow, and there are other troubling indicators, such as a slowing-down of home sales.

The economy is vital to the political health of any president, but Trump may be particularly vulnerable to a slowdown for several reasons.

First, when the stock market was behaving more bullishly, he boasted that he should be given credit for its performance.

In November 2017, he tweeted, “The Dow just broke 24,000 for the first time (another all-time Record). If the Dems had won the Presidential Election, the Market would be down 50% from these levels and Consumer Confidence, which is also at an all-time high, would be ‘low and glum!’ ”

Efforts to take credit for the rise of the stock market leave him at particular risk of being blamed as it falls.

Second, Trump’s job approval ratings are lower than average — and at times have hit historic lows for a president — even when the economy has been performing strongly.

Many observers believe the robust economy has propped up his approval ratings, even to that modest level. If that prop is kicked away, they suggest, it could cause real problems, not just for his reelection chances but also for his ability to hold his party in line.

Julian Zelizer, a professor of history and public affairs at Princeton University, noted Trump’s propensity to brag about the economy and the stock market, adding: “If you end the year in this fashion and the numbers don’t match, it doesn’t matter to his supporters — but it matters to a lot of Republicans who are holding their nose and living with him because the economy is doing well.”

Zelizer added, “If the economy does poorly, you might see real cracks, and I think he understands that.”

The ability of Trump to claim the loyalty of Republican voters — and Republican lawmakers — could be a make-or-break issue as special counsel Robert Mueller Robert (Bob) MuellerCNN's Toobin warns McCabe is in 'perilous condition' with emboldened Trump CNN anchor rips Trump over Stone while evoking Clinton-Lynch tarmac meeting The Hill's 12:30 Report: New Hampshire fallout MORE moves ahead with his probe and Democrats consider launching impeachment proceedings.

Still, some Republicans caution that it is too early to tell how much the economy is going to slow down or how severe the stock market decline will be.

Republican pollster David Winston noted that Trump has typically enjoyed higher polling numbers when it comes to his handling of the economy in particular, than for his overall performance as president.

Much will depend on both the severity of any downturn and how Trump is perceived to handle it, Winston said.

“Obviously, given the stock market, this has been a difficult couple of weeks,” the pollster said. “So is this just a short-term correction or is there something systemic about it? Obviously, the expectation in the country is that there will be command-focus on this from Washington.”

Trump defenders also note that, even with the recent declines, stocks have risen appreciably over his time in office. The Dow Jones is up about 25 percent since he took office, even after its recent decline. Similarly, economic growth rates have been higher than many experts predicted.

If the Trump economy can outperform expectations once again, it would pay rich political dividends for the president. But if the downtown is for real, and prolonged, all bets are off.

“No president can afford a bad economy,” said Zelizer, “especially an economy that gets worse over his time in office.”



The Memo is a reported column by Niall Stanage, primarily focused on Donald Trump’s presidency.