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Trump Loses Mind As Draghi Tips Rate Cuts, Says ‘Mario D.’ Is A Cheater
Donald Trump's first order of business on Tuesday morning was to respond, on Twitter, to comments Ma
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Draghi may well be trying to force the Fed’s hand. . .it’s called chess Donnie not checkers. . .
Why would Draghi want to force the Fed’s hand? That doesn’t make any sense. The effectiveness of cuts is in part due to yield differentials. It’s better for Europe if US maintains stronger relative rates. Draghi is looking at EU data, not Fed dot plots or EURUSD.
Watching Trump spewing garbage like that is actually painful.
Synchronization of messaging. Expectations of policy divergence must be squelched. Messaging has become an indispensable tool of monetary policy – for better or worse. Andalfatto sending up the Repo facility balloon. Brainerd talking QE with longer dated bonds meshes well with Draghi’s comments. Fed statement will be similarly dovish. Also want Powell on board before Weidmann takes over the ECB.
That is the inherent contradiction in Fill in the Blank First policies. Far-right people may have affinities for their compatriots in other countries, because they hate many of the same types of people. But there can only be one America First leader. The other leaders are Hungary First, or Brazil First, or Philippines First, or India First, or what have you. Their narrow national and partisan interests will take precedence over international or transnational problems, and since they have already dismissed pluralistic co-operation and comity, the only resort they have left are hard acts of power.