Just two weeks ago, the financial world was on pins and needles that Trump was about to drag Europe into the ongoing US trade/currency war, when he slammed the outgoing ECB head after he unleashed an unprecedented dovish tirade that sent the Euro (briefly) lower and bund yield to new record lows, saying “German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!”
German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!
— Donald J. Trump (@realDonaldTrump) June 18, 2019
In retrospect, it appears that Trump’s comment was actually praise because during a torrid, ad hoc interview on Fox Business with Mario Bartiromo this morning, the President said the US “should have Draghi instead of our Fed person” and once again said that he has the right to demote or fire the “Fed person”, Chairman Jerome Powell.
“Nobody ever heard of him before, and now I made him and he wants to show how tough he is,” Trump continued his unprecedented vendetta against Powell, speaking. “OK, let him show how tough he is. He’s not doing a good job.”
Meanwhile, if Draghi wants to continue his job as a central bank head once his tenure at the ECB ends on Oct. 31, he appears to be shoo-in at the Fed, although he may face a stern, deathmatch challenge from that other uber-dove, Neil Kashkari who recently said he would have cut 50bps last week, just to curry favor with the president who may be even more dovish than the former Goldman IT banker.
Trump to try and sign Draghi on a free in October after placing Powell on the transfer list https://t.co/OsIdL1oOpI
— RANsquawk (@RANsquawk) June 26, 2019
Trump’s Fox Business tirade was only the latest in a long series of attacks on the Fed, tweeting on Monday that policy makers “blew it” on June 19 when they kept the benchmark overnight rate unchanged. He compared the Fed to a “stubborn child.” He’s also recently denied a Bloomberg reported that he had threatened to demote Powell, but nonetheless insists he has the authority to do so.
Trump reiterated those points on Fox Wednesday, saying: “I have the right to demote him. I have the right to fire him,” but Trump “never suggested” he would actually take such an action.
And as the feud between the world’s two most powerful people escalates, on Tuesday, Powell highlighted the importance of the central bank’s autonomy from political interference, even though he didn’t mention Trump by name.
“The Fed is insulated from short-term political pressures — what is often referred to as our independence,” Powell said. “Congress chose to insulate the Fed this way because it had seen the damage that often arises when policy bends to short-term political interests.”
Ironically, in a segue that would make it easier for the Fed to cut rates and thus appease Trump, Powell reiterated that downside risks to the U.S. economy have increased recently, reinforcing the case among policy makers for somewhat lower interest rates.
That narrative, however, may be problematic for Trump, who keeps on demanding a “Erdoganomic” solution, claiming that the US economy has never been stronger while urging the Fed to cut rates sharply lower.
Alex Jones’ Lawyer Responds To “Jew Boy” MSM Hoax Report
The term “white-shoe boys” has been around since the 1950’s, but a recent uncertified court transcript attempts to smear Alex as having said the phrase “white Jew boy”. Attorney Norm Pattis joins Alex to discuss the current legal developments and expose this unwarranted attack on Alex Jones’ character.