‘Record High!’ Trump Elated As Fed Brought To Heel, Says Iran Probably Shouldn’t Doubt How Crazy He Is
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 op
Nothing like a Ship of Central Banks & A Political Fool navigating the unchartered waters of post unprecedented QE infused 2009 monetary policy.
Demote Powell and promote Bullard,
People need to give Powell some space here. There is a good case for cutting rates in the near term, regardless of your view on Trump’s shenanigans. The economy is on a slowing trajectory and inflation is low. Stall speed is somewhere below 4% nominal growth and if inflation is slowing and is now only 1.5%. One can see the handwriting on the wall regardless of the threats from our great leader. Should Powell be playing politics in not cutting to thumb his nose at Trump? I do not think so, even though I am personally rooting for a mild slowdown prior to the election to finally get his majesty out of office.
Record high S&P, unemployment at 3.6%, longest economic expansion in American history, and a Federal funds rate at 2.4%. What should the rate be if we have a recession? -6%?
Like most other central banks, the Fed seems like it doesn’t have enough weapons for a severe recession. But I think Ria’s point is that Powell was likely acting in good faith trying to prevent that recession, rather than simply feeling bullied by Trump. Another way of stating your point is that Trump took a great economic expansion, and was reduced to begging for help from the Fed to avoid (or perhaps delay) running it in the ground. It’s kind of like ruining a great business that your parents gave you, and then asking daddy for a loan to bail you out. I’m not necessarily a great Powell fan. But I just don’t see the basis to conclude that based upon all the data before him, he acted in a way that was irrational only to please Trump and keep his job.
I think you are giving Trump to much credit. It should be Team Whitehouse, It seems pretty clear that they (Mnuchin/Kudlow etc) brought in an ex-trader(s) to the WH (likely an ex-Macro Hedge fund folks), to help with the analysis and timing. It is actually a rational thing to do if you don’t believe in norms, and don’t care about the long term effects.
By timing tweets, and saying market triggering items, they likely drive the market higher than it might otherwise would be.
The winners are the fast acting algos.
At some point this strategy will not end well.
C’mon H, leave the hyperbole to Trump. The S&P didn’t actually “smash” through record highs. It just nudged through after a rise during the asian session before immediately pulling back after the open.