But then during his press conference following the announced rate cut, Fed Chairman Jay Powell said Fed members weren’t ruling out additional rate reductions, but neither did officials view Wednesday’s action as “the beginning of a long series of rate cuts,” he said. “You would do that if you saw real economic weakness…. That’s not what we’re seeing.”
The stock market turned negative on the comment and the Dow Industrials closed down 333.75 point on the day.
Trump exploded:
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....— Donald J. Trump (@realDonaldTrump) July 31, 2019
And then a few hours later:....As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place - no inflation. We are winning anyway, but I am certainly not getting much help from the Federal Reserve!— Donald J. Trump (@realDonaldTrump) July 31, 2019
Bottom line: Trump is a serious inflationist and expect him to continue to put pressure on Powell. It is getting more likely that he will replace him as head of the Fed by the end of the December as we head into the presidential election year.Experts stated that the Fed should not have tightened, and then waited too long to undo their mistake. James Bullard of St. Louis Fed said they waited too long to correct the mistake that they made last December. “Mistake, Powell cut rate and then he started talking.” @LouDobbs— Donald J. Trump (@realDonaldTrump) August 1, 2019
-RW
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