‘As Usual, Powell Let Us Down’: Trump Verbally Abuses Beleaguered Fed Chair After Bungled Press Conference

On Tuesday, a fatalistic Donald Trump seemed resigned to the notion that the odds of the Powell Fed doing “enough” to placate markets and push the dollar down were low.

“The EU and China will further lower interest rates and pump money into their systems, making it much easier for their manufacturers to sell product”, the president lamented.

He went on to predict that the Fed will “probably do very little by comparison”.

Read more: A Disgusted Trump Delivers His July FOMC Preview

Fast forward to Wednesday afternoon and Jerome Powell – bless his heart – put in what might very fairly be described as his worst press conference performance as Fed chair, no small feat from a man whose tenure has been defined by bad pressers.

The Fed cut rates, of course, but Powell’s reference to a “mid-cycle adjustment” and extraordinarily ill-advised decision to say, explicitly, that “this isn’t the start of a long series of rate cuts”, were a potent one-two gut punch for stocks, which fell the most since late May.

Perhaps more worrying was the spike in the dollar and the flattening in the curve (the 2s10s was flatter by 10bp at one juncture).

Now, the Fed risks a nasty unwind in crowded rates positioning if they don’t work to soften the blow. If the data comes in strong (e.g., if we get a blockbuster jobs report on Friday and/or another hot inflation print next month), it will become exceptionally difficult for policymakers to manage the situation.

If the Fed doesn’t signal more cuts and the US economy holds up as the ECB continues to telegraph more easing amid ongoing weakness in the bloc’s economy (see Wednesday’s lackluster growth and inflation data), the dollar could rise further, a development that would almost surely prompt Trump to lose his mind.

Sure enough, on Wednesday evening, the president hopped on Twitter to deliver his July FOMC postmortem.

“What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world”, Trump said, clearly combining his own intuitions with something Larry Kudlow wrote for him (the grammar was a bit too formal to have come directly, unfiltered from the president).

It was an escalator up, and Trump wants an elevator down.

He then threw Jay under the bus. “As usual, Powell let us down”, Trump sighed, before giving the Fed chair credit for “at least ending quantitative tightening”.

Trump closed things out on a foreboding note, digitally shouting that “We are winning anyway, but I am certainly not getting much help from the Federal Reserve!”.

With the White House counsel having already explored the legality behind demoting Powell, and Jay likely at wit’s end with the daily abuse, it’s just a matter of time before the Fed chair either abdicates or his demoted. This is wholly untenable (for both men) headed into an election year.

Read more:

It’s Almost Over For Jerome Powell As Trump Says He Has Authority To Replace Fed Chair

It’s Official, White House Weighed ‘Legality’ Of ‘Demoting’ Jerome Powell