Donald Trump took to Twitter on Sunday morning to serve up some pipin’ hot “covfefe”.
He kicked things off in predictable fashion, plugging Fox News and teasing an upcoming rally for embattled Senator Cindy Hyde-Smith.
After dispensing with those relatively mundane topics, he moved on to address three of the things he cares about most these days: the caravan, oil prices and the Fed.
On migration, you’re reminded that on Thanksgiving, Trump told reporters he had signed an order shutting parts of the border due to the preponderance of street brawls in Tijuana, which he attributes to Honduran migrants (as if nobody ever got into a fist fight in Tijuana before this month). He also said he’s authorized the military to use deadly force at the border.
The President’s Thanksgiving immigration balderdash came hot on the heels of a legal setback for his new asylum crackdown which essentially amounted to Trump invoking the same national security powers he cited in his Muslim ban to deny asylum to anyone who crosses the border illegally.
“Would be very SMART if Mexico would stop the Caravans long before they get to our Southern Border, or if originating countries would not let them form”, Trump tweeted on Sunday, before again claiming that this is all a conspiracy. “It is a way they get certain people out of their country and dump in U.S.”, he said, without providing evidence. He then blamed Democrats: “Dems created this problem. No crossings!”
Again, it would appear Trump is moving in the direction of trying to shut the U.S. border completely.
Next, Trump proceeded to brag about his highly successful effort to trick OPEC into overproducing ahead of the Iran sanctions only to grant waivers to eight nations just as U.S. production surged and his trade threats undermined the outlook for global growth and, by extension, demand. That combination sent crude tumbling into a bear market earlier this month and over the past two weeks, oil careened through key levels associated with options owned by producers, a development which triggered forced selling from dealers, further accelerating price declines.
As if all of that wasn’t enough, Trump’s decision to effectively grant a pardon to Crown Prince Mohammed for ordering the extrajudicial killing of dissident journalist Jamal Khashoggi virtually ensures that the Saudis will think twice before agreeing to a much needed production cut that would stabilize prices. The end result: an outright plunge in oil.
“So great that oil prices are falling”, Trump exclaimed on Sunday morning, before reminding everyone who they can praise for crude’s dramatic drop:
Thank you President T.
As a reminder, here’s what “President T.” has succeeded in doing to crude (the bars represent the weekly change in prices):
“President T.” then reminded Fed chair Jerome Powell that if it’s inflation the Fed is concerned about, plunging oil prices should help.
“Inflation down are you listening Fed!”, Trump shrieked.
So, just to be clear, “President T.” is now attempting to cite the oil price collapse he engineered as evidence to support his claim that the Fed can stop hiking rates because with crude in free fall, inflation isn’t a concern.
Of course the Fed generally looks through volatile energy prices and is more concerned about rising wage inflation and the distinct possibility that the tariffs are about to push up consumer prices, but Trump doesn’t care about that.
Whether or not the Fed is “listening” is debatable, but the market sure is. Futures are now pricing in just one full rate hike in 2019, well below the Fed’s own projections.
So, again: “Thanks President T.!”