Donald Trump, whose banner image on Twitter is now a panoramic shot of himself, arms outstretched, shrieking at a crowd of MAGA-ophiles, was briefed on the situation with Iran on Thursday morning.
That likely accounts for his conspicuous absence on social media between the usual heavy-tweeting hours of 6 AM and 8 AM.
His first Thursday tweet came about a half-hour into the trading day on Wall Street and it was, predictably, a celebratory remark about the Fed-inspired equity rally.
“S&P opens at Record High!”, the president exclaimed, capitalizing two words that definitely don’t need to be capitalized.
It’s true, Trump managed to bully and badger his Fed chair into leaning so hard into the imminent rate cut narrative that stocks smashed through record highs on Thursday morning. Congrats to the president: He has succeeded in commandeering US monetary policy, Erdogan-style, and his base will surely forget that this is the same person who, in 2016, accused Janet Yellen of “doing political things” by keeping rates low and who, weeks later during a debate with Hillary Clinton, called the US stock market “a big, fat ugly bubble” propped up on easy money.
Thursday would be the benchmark’s fourth consecutive day of gains and puts US equities on track for their second-best month since October of 2015.
Even better (for the White House, anyway) the dollar is squarely on the back foot, finally succumbing to falling US rates and giving both risk assets and Trump’s trade war a fillip in the process.
Better still for the man who holds the all-time record for most interest paid in a single year, long-term borrowing costs are plunging to levels last seen prior to his election. TD sees 10-year US yields falling to 1.30% by the end of Q2 2020.
All that’s missing from this equation is a truce with China, although, assuming there is a method to Trump’s madness when it comes to the Fed-trade-market nexus, he likely realizes that calling off the trade war entirely risks the market starting to price Fed cuts back out. Even if you don’t think the FOMC is responding to pressure from Trump, the Committee is certainly responding to the bond market, so the danger in adopting a conciliatory stance on trade too early is that Powell reassesses the urgency around easing policy.
Then again, if Powell doesn’t cut next month, he’ll likely be demoted, so maybe it doesn’t matter.
As far as Iran goes, Trump isn’t happy. According to reports (and according to his own campaign promises), the president isn’t anxious to get the US involved in another foreign war, let alone another intractable conflict in the Mideast. But Iran’s move to shoot down a US drone has doubtlessly hurt Trump’s pride, which accounts for this:
Iran made a very big mistake!
— Donald J. Trump (@realDonaldTrump) June 20, 2019
He didn’t immediately elaborate.
Read more: Iran’s ‘Clear Message’ For Donald Trump