In yet another unprecedented move from our iconoclastic president, President Trump bashed New York Fed President John Williams in a tweet on Friday morning, saying the Fed doesn’t deserve any credit for engineering what has become the longest period of economic expansion in US history.
Yesterday, Williams sent the S&P 500 back into the green after he appeared to suggest that the Fed would deliver the 50 bp rate cut that the market so desperately craves. However, the NY Fed soon walked back Williams extremely dovish comments, saying Williams’ words didn’t reflect “potential policy actions” at the FOMC meeting later this month.
Now, Trump is praising Williams for acknowledging yesterday that the central bank raised rates too quickly, then bashed Williams for trying to take credit for the booming economy.
I like New York Fed President John Williams first statement much better than his second. His first statement is 100% correct in that the Fed “raised” far too fast & too early. Also must stop with the crazy quantitative tightening. We are in a World competition, & winning big,…
— Donald J. Trump (@realDonaldTrump) July 19, 2019
….but it is no thanks to the Federal Reserve. Had they not acted so fast and “so much,” we would be doing even better than we are doing right now. This is our chance to build unparalleled wealth and success for the U.S., GROWTH, which would greatly reduce % debt. Don’t blow it!
— Donald J. Trump (@realDonaldTrump) July 19, 2019
….Fed: There is almost no inflation!
— Donald J. Trump (@realDonaldTrump) July 19, 2019
Trump then insisted that there’s almost no inflation, which means the central bank should acquiesce to his demand to slash interest rates by a full percentage point and launch QE4.
….Fed: There is almost no inflation!
— Donald J. Trump (@realDonaldTrump) July 19, 2019
While the USD and short-dated Treasury yields have unwound their post-Williams move after the central bank’s walkback, US stocks opened higher…so they rallied on the comments AND the walk back.
At this point, economists and analysts agree that the Fed’s December rate hike was a mistake. And we’d bet money that Neel Kashkari is probably fuming about how the president hasn’t noticed his eagerness to cut to -1%.
via ZeroHedge News https://ift.tt/2JGOR5q Tyler Durden