Minutes before the text of Jerome Powell’s Jackson Hole speech was released to the public, Donald Trump sent his regards. “Now the Fed can show their stuff!”, the president exclaimed.
It wasn’t clear what Trump was expecting. Powell cannot unilaterally cut rates on a whim during a pre-written speech just because China chose Friday to announce retaliatory measures against the US in the trade war.
Still, Powell did manage to engineer a bounce in risk assets off the morning lows hit following China’s announcement of new tariffs on US goods. The Fed chair emphasized the downturn in the global economy and went out of his way to enumerate all the geopolitical risks weighing on sentiment.
Read more: Powell Emphasizes Global Slowdown, Geopolitical Turmoil In Crucial Jackson Hole Speech
But it wasn’t enough for the president. Clearly, Trump expected Powell to, at the least, telegraph a commitment to aggressive rate cuts.
The president, already irritated after China’s broadside, launched into a spectacularly irritated harangue over the course of a half-dozen tweets. Here it is, in all its bombastic, angry glory:
As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great.
My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?
Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States. Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop – it didn’t. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!
Stocks had stabilized following Powell’s remarks and might have managed to coast safely through a lazy August Friday into the weekend. But following the president’s tweets, equities headed sharply lower.
This is a kind of worst-case scenario in the making. One of the risks headed into Friday was that if Powell stuck to the script in terms of suggesting that while the committee will provide the accommodation necessary to prolong the expansion, the Fed doesn’t view any rate cuts as a precursor to an honest-to-goodness easing cycle, it could be seen as the central bank rebuffing the White House’s efforts to force rate cuts by escalating trade tensions.
While that would be a positive development to the extent the Fed shouldn’t enable trade escalations (because it could encourage still more tariffs), it would force markets to ponder a scenario where Trump doesn’t get, or is unwilling to accept, the message from the Fed and keeps pushing the envelope on China to test Powell’s mettle.
Nobody wants to think about that scenario, but now we’re in it.
As ever, Trump is his own worst enemy and from the sound of his tweets, things are about to get worse.
So the Fed is supposed to backstop a war with China?
Wait a second. This is the guy who filed for Chapter 11 six times, single-handedly brought about the demise of the U.S. Football League, lost $125 million on an airlline, bankrolled a fraudulant online university, and has lied to, cheated, and conned the American public for the last forty years — and you expected this to end well? Fool me once…
“hereby ordered to immediately start looking for an alternative”
Can the Fuhrer order US companies what to do? I guess we’ll find out.
Scarier by the moment
Trump seems to believe he can. “For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977. Case closed!”
would love to be a fly on the wall in offices of US manufacturing firms just now.
So Powell throws Trump a high slow one, and instead of hitting out of the park he pops up to the catcher. Idiot.
Supreme Leader Trump, The Chosen One, can, of course.
Dear Free-Market Republicans, are you listening?
Mr. McConnell, Sir, anything you wanna add?
But, hey, at least Sean Spicer will be on “Dancing with the Stars”, winning bigly.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.” So the King of Israel and The Chosen One has commanded. Someone should also point out to him that Powell is the “Chairman” of the Fed Board and not its autocratic head.
…maybe also that HE HIMSELF nominated Jay “public enemy no. 1” Powell
My country’s leader once ordered all the birds be removed from the forest he was holidaying in. He had soldiers climb the trees and destroy their nests. But he ordered that some birds be left there just so they could sing softly but not too loudly. Welcome to the club americans.
Wow! Which country is this?
I thought this was one of Powell’s better moments in some really tough times. I knew somebody would put out that above graphic (so I didn’t) … way to go Walter! This will piss off a bunch of people who lost money today and will keep more and more investable capital in cash (me for sure)
Buy GOLD!
This is all commonly known as “DIARRHEA of the MOUTH ” Our great elected leader…. the man that would be King
I suppose hanging him (trump) for treason is off the table for the time being?
I will be responding to China’s Tariffs this afternoon — and making America great (oh shit)
Businessman Trump never had to manufacture anything of complexity. Producing products like iPhones is not the same as Real Estate. Flipping manufacturing can not be done overnight on the whims of his tweets. Just as the Chinese will do, most US companies will do, and this to wait out Trump IMO.
Powell has reportedly been working hard on getting close to Congressional leaders. I would think that in those conversations he’ll be more explicit about the Fed assessing and responding to the consequence of tariffs rather to than the threat of new tariffs.
Watergate was a barometer of public sentiment, where in general, the majority of people, including members of Congress, wanted Tricky Dick out, thus the environment was ripe for impeachment. The environment today sets the stage for a majority to unite in efforts to remove trump from office. American business entities must surely understand the need to not financially support the GOP at this point — and that threat will move the ball down the field very fast IMHO!
Remember, impeachment does not remove a President or Federal Judge from office. The act of impeachment by the House of Representatives is an indictment or accusation, which calls for a subsequent trial in the Senate. As long as McConnell is in charge the Senate will never convict Trump, no matter what evidence is presented. In the US today Trump cannot be successfully removed from office. That is why Pelosi has no interest in risking the Democrat Party’s majority in the House for an unwinnable cause.
How much damage does the increasingly (un)stable genius have to do to America’s reputation, economy, manufacturers, small businesses and Midwest farmers driven into bankruptcy, before the Public comes around to a broad consensus that Trump is unfit to govern, thus freeing Representative Pelosi, the U.S. Senate et al to discard their reluctance to act on moving forward with Impeachment proceedings. Putin won’t help him then.