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Trump, The Fed And The Dollar Constraint
Over the past two weeks, talk of direct, active FX intervention on the part of the Trump administration has reached a fever pitch.
At this point, it seems wholly implausible to suggest the US president is blissfully ignorant of the irony inherent in boasting about the relative strength of the US economy and complaining about the resiliency of the greenback. In the same vein, he surely realizes that the trade war is in no small part responsible for the global manufacturing slump gripping the res
Initially Trump believed, and complained that the rising Fed interest rate meant the government paid a higher interest on its’ borrowing. Now, of course, the perception of rate cuts has seen the market higher as money flows out of bonds into it and the bond yield, which is the actual interest the treasury pays, go higher just when they need to issue more bonds. Of course, the worlds leading economist and self proclaimed arms salesman is only interested in the White House day trading.