ECONOMICS QUIZ: Which of these individuals or groups is most likely to have “gone crazy,” gotten “ridiculous,” or behaved “a little too cute” in recent days: a) The Federal Reserve; b) stock market traders; or c) President Trump?

We say (c), though the president himself has let it be known that he would have picked (a), due to the recent sell-off of shares by (b). Mr. Trump’s latest attempt to blame the Fed for inconvenient financial news presents yet another opportunity to reflect on how inappropriate it is for a president to publicly castigate an independent central bank.

Indeed, as amond Mr. Trump, Wall Street market mavens and Federal Reserve Board Chairman Jerome H. Powell, the latter has the least political or financial self-interest in the real-world effects of the Fed’s policies. Mandated by Congress to strike the most sustainable possible balance between low inflation and high employment, Mr. Powell, the Fed open market committee, and the Fed’s respected team of economists and forecasters certainly do not have a monopoly on the truth regarding the U.S. economy’s future. But they do have the next best thing: a genuinely nonpartisan perspective on it. Therefore, their judgment about interest rates and other crucial policy measures merits deference from the White House, as Mr. Trump’s recent predecessors recognized — while he, alas, does not.

Wall Street had one of its periodic freak-outs starting on Wednesday, with the Dow Jones industrial average plunging more than five percent over two days before recouping some losses Friday. This was partly a reaction to Mr. Powell’s comments during a recent television interview that the Fed was still “a long way” from needing to cease its current upward adjustment of interest rates. When interest rates go up, investors switch from stocks to bonds, causing the prices of the former to fall. Taken together with worries that the economy might experience slower growth in the near future, the Fed chair’s remark prompted many to sell. Mr. Trump is clearly unhappy that this punished the voters’ 401(k)s just a few weeks before the midterm elections.

Does Mr. Powell have the policy right? Inflation is hovering near the Fed’s 2 percent target, with unemployment at a 50-year low, so an objective view would be that almost anything he might do carries a risk of bumping the economy off this near-perfect balance. Nevertheless, there is clearly no further need for the radical monetary stimulus the Fed applied during the Great Recession in 2008-2009 (especially since Mr. Trump’s tax cuts and spending increases are pumping up the economy). Mr. Powell’s belief that the economy can and should continue growing without artificial central bank support represents a valid interpretation of both current data and historical experience.

Mr. Trump and Wall Street may not like the policies of the Fed chair the president appointed, and there may be costs on Main Street as well. It is worth remembering, though, what a high price the United States, and the world, paid for the unduly loose financial conditions that prevailed before the financial crisis. As then-Fed chairman William McChesney Martin noted in 1955, sometimes the central bank must be “the chaperone who has ordered the punch bowl removed just when the party was really warming up.” Now seems to be one of those times.

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