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Trump criticizes Fed

June 12, 2020

June 12, 2020

Trump barks but the caravan moves onDmitri Demidenko

Here we go again, Donald

All those women who are more beautiful than me are witches! The market’s attention has been entirely riveted on the Fed during the second week of June, which Donald Trump doesn’t like. The President, who has been severely criticizing Jerome Powell for 2 years, has returned to his old ways saying he’s been doing his job much better than Fed chair. It doesn’t matter that he praised Powell for a large monetary stimulus and called him “the best player in the team” not long ago. Trump’s mood changes like a woman changes clothes.  And like the WHO changes its attitude to mask wearing.

![LiteForex: Trump criticizes Fed][1]

Which one would you prefer, Jerome: Mendelssohn’s “Wedding March” or Chopin’s funeral march? The president had been actively asking Fed chair to cut the federal funds rate and revive QE. He would say, other countries’ soft monetary policy granted them a competitive advantage. Powell had been threatened with a dismissal many times. At the beginning of summer the White House resident got upset about the Fed’s downbeat forecasts for GDP, inflation and unemployment rates. According to White House economic adviser Larry Kudlow, the Fed head had been doing his job well, but a little bit more optimism would be welcome. Instead, the Central bank mentioned a long economic recovery at FOMC’s meeting in June. It distressed US stock indexes.

[S&P 500][2]’s epic 40% rally from March’s bottom levels was based on cheap liquidity and belief in a V-shaped recovery of the US GDP.   The mice that wanted to turn into hedgehogs cried but continued eating a cactus; the buyers didn’t pay attention to pessimistic stats or a complicated epidemiological environment. They swallowed spines trying to catch the last train to the north of the US stock market. Rubbing his hands, Trump knew that the rise of stock indexes was favourable to his rating. The US president made his contribution to S&P 500’s rally by promoting the idea of a fiscal stimulus through the Congress.

- No need to thank me. Start moulding my statue instead.

![LiteForex: Trump criticizes Fed][3]

From the very beginning of his presidency, it was obvious that Trump’s main principle was “after us the deluge”. He managed to implement a tax reform which wasn’t particularly needed in the conditions of economic growth. The reduction of expenses and increase of budget deficit and state debt seemed excessive back then, but everything is comparative. The pandemic may blow the US debt to 130% of GDP. But who would be concerned about that if the president decided to make the States a paradise on earth. He must have forgotten: it’s better to get to hell later than to paradise now.

![LiteForex: Trump criticizes Fed][4]

I don’t think Jerome Powell will change his ignoring tactics.  Dogs bark but the caravan moves on. As an independent system, the Fed will go on doing what it must despite all stones cast by the president. However, the bank did cut the rate to zero and revive QE, which means criticism does affect people’s states of mind.

- Elephants may bark but the caravan moves on.

- Where to?

- Psychiatrist

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Price chart of SPX in real time mode

![Trump barks but the caravan moves on][7]

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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