Donald Trump spent some time with Romania’s President Klaus Iohannis at the White House on Tuesday, where the two chatted about trade and energy, apparently.
Of course, Trump never misses an opportunity to transform an unrelated event into a soapbox, which is why it comes as no surprise that the market was forced to digest some fresh musings on monetary policy.
“They have to do a rate cut”, Trump said of the Fed. “I’d like to see a cut… because that should have happened a long time ago”, he explained, on the way to extolling the virtues of “big”, “proactive” policy easing. This comes just a day after the president accused Jerome Powell of demonstrating a “horrendous lack of vision”.
He also weighed in on the economy, a hot topic right now that, by all accounts including his own, is occupying the president’s “very large brain”.
“[The US] is very far from a recession”, he said. On the rumored fiscal initiatives tipped on Monday evening, the president mused that “a lot of people would like to see a payroll tax cut”.
Those “people” include middle-income families and Democrats, but maybe not so much Republicans.
“[We’re] looking at various tax cuts all the time”, he went on to remark.
On China, the president reiterated the obvious, which is that the US “isn’t ready” to make a deal just yet, although something could happen soon. In reality, the two sides are the furthest away from a deal they’ve been since this time last year. Trump also said that if he were to slap tariffs on European cars, Brussels would meet any demand he wanted.
As far as the size of the Fed cut Trump would like to see, he wants “100bp at minimum over time”.
“Over time” presumably means “over” the next four months.
Trump’s argument is logically inconsistent. Why should we be surprised…