After bashing The Fed and calling for rate declines, Trump is doubling down by asking The Fed to counteract China’s stimulus attempts to survive the ongoing trade war.
(Bloomberg) — President Donald Trump pushed the Federal Reserve to “match” what he said China would do to offset economic hardship being caused by tariffs as he sought to draft the U.S. central bank into his simmering trade war.
“China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing,” the president said in a tweet Tuesday. “If the Federal Reserve ever did a ‘match,’ it would be game over, we win! In any event, China wants a deal!”
His explicit call for the Fed to be a weapon in the fight against China is a clear escalation in Trump’s repeated efforts to pressure the U.S. central bank to stimulate the U.S. economy, even though growth is solid and unemployment is at a 49-year low. The remarks may also help him deflect blame onto the Fed if the escalating trade dispute causes the U.S. economy to stumble as he seeks reelection in 2020.
Export and import price growth for the US is about zero.
True, soybean futures have declined, but rose today.
The Dow has made a sudden increase following a mini-crash yesterday. That is volatility!
Yes, while The Fed has killed off volatility, Trump has created volatility on his own (along with the Chinese government).
Uhm, markets are already anticipating rate cut in late 2019. But is The Fed tough enough on China?