As ‘Large Local Risk’ Realized, Fed May Be Forced To Finance Political ‘Rationality Deficit’
If Donald Trump was looking to stoke enough uncertainty to make Fed chair Jerome Powell think twice about the notion that a "mid-cycle adjustment" will be enough to offset the psychological drag from the ongoing trade conflict, the president likely succeeded on Thursday.
Trump's abrupt announcement of new tariffs on the remainder of Chinese imports took markets by surprise, just when US equities were in the middle of staging an impressive rebound off Wednesday's post-FOMC selloff.
To be sure,
The idea that investors should not worry about tariffs because the fed will step in and that is also the reason trumpolini is doing all this is just idiotic. It is equivalent to burning the village to save it. In other words he is just destroying global trade and global order so the fed can cut so markets can rally. Another idiotic idea courtesy of Goldman i think is that tariffs even if they end up hurting will only hurt the manufacturing side of the economy, leaving other sectors unscathed. Never mind the interdependencies between sectors just slice them put them aside and pretend they don’t exist. Markets in the US have mistaken Chinese goodwill towards accommodating american irrational behaviour in order so they can find some common ground and continue trading, as inability from the Chinese side to respond to whatever the US does, it is a mistaken belief.
And don’t forget: trade wars are easy to win. LOL.
so much winning…
@ Anon: agreed, to mistake chinese goodwill/accomodation for ineptitude is a grave mistake.
But do not expect the stable genius to understand any of this.
The way he talks about GeeDeePee you can tell he has the economic understanding of a five-year old.