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Donald Trump has a clear vision of the interest rate hike policy of the US central bank – the Fed. However, in a recent interview for the Wall Street Journal, the billionaire has justified his criticism. He did it in such a bizarre way that the words quoted most market analysts and foreign media.
– The Fed is my main threat because it raises interest rates too quickly, said Donald Trump in an interview with Fox Business TV in October. Earlier this summer, the President of the United States called the Federal Reserve's actions strange and prejudicial. However, he did not stop there.
Donald Trump on Fed policy. Is the premonition better than the mind?
The president pointed out in an interview for "WSJ" that he is not happy with his election as president of the Fed.
– However, it seems more important to justify his opinion. Well, Trump "has a hunch" that sometimes tells him more than the "spirits" of others. It's hard to argue with that and focus more on the criticisms of the Fed and Powell. This time, we are not dealing with a frivolous statement at a charity dinner, but an authorized interview for the national newspaper. The words are well thought out and show how much Trump's dissatisfaction with rising interest rates writes Konrad Białas, chief economist at TMS Brokers.
So if the billionaire pointed out that the Fed is making the wrong decisions, and it has a premonition, who tells him much more than any great spirit, it is worth wondering how the criticism of the White House could develop.
– In the future, we will probably hear more criticism, which could be a source of turbulence in the markets or fuel nervousness during periods of deterioration of feelings. On the other hand, Trump has no power to change the Fed's policy and Powell's appeal (the congressional decision is necessary). In addition, the Fed cultivates its independence and, in its decisions, cultivates a conscientious calculation of economic factors. Neither I nor anyone else on the market can imagine that the Fed would be under Trump's pressure, "said Białas.
– It is essential for the market to know whether it will always consider regular increases as the good (or the Fed), or whether it will act more punctually after the December rally. Yesterday's comments from Fed representatives were not unequivocal on this topic. The deputy chief of the Fed said the current strategy was appropriate, but his statement concerned more of the current period than that of 2019. – comments Przemysław Kwiecień, chief economist at XTB.
Sino-US tensions continue
Speaking of the US President, we must still refer to his comments on US-China trade relations.
The billionaire said the preparations for an increase in tariffs from 10 to 25%. With $ 200 billion in full swing, and if the G-20 talks in Argentina do not end as President Trump wishes, the United States will impose the remaining imports from China. Larry Kudlow, an economics advisor at the White House, relaxed the tone of the statement.
He announced Tuesday that President Trump believed that there is a "great chance" to conclude a trade agreement with China.
Kudlow added that Trump is also ready to impose more tariffs on China if the next meeting does not bring progress.
The market, for the moment, prefers focus on the positive "parts" of the information provided by Kudlow.
At the G20 summit in Buenos Aires on Friday, US President Donald Trump is due to meet with Chinese leader Xi Jinping on Saturday for the first time since the United States and China imposed tariffs on the United States. ;import.
The rest of the market information
What's happening on the market on Wednesday? In Great Britain, the final parliamentary vote in the Brexit case is approaching. State and government leaders from 27 EU countries on Sunday approved the Brussels agreement on Britain's exit from the EU and a political declaration on relations future. The divorce document must now be voted by the European Parliament and the British Parliament.
Investors are still interested in the Italian budget. On Wednesday, Italian Prime Minister Giuseppe Conte, quoted by the Corriere della Sera, said that negotiations with the EU on the Italian budget "will not be easy".
Mr Conte told the European Commissioner for Economic and Financial Affairs, Pierre Moscovici, that "social stability is more important than finances". He added that it was enough to watch the protests of the "yellow vests" of France.
"We will carry out our reforms," Conté said. "We will not come back, the problem is to do it well" – he added.
Valdis Dombrovskis, vice president of the European Commission, said in an interview with "La Stampa" that he was expecting a "significant correction" of the 2019 budget plan proposed by Italy.
"Politics has almost eclipsed everything else," said Mattias Sundling, senior strategist at Danske Markets. "These are trade negotiations, Brexit, Italy, Fed," he lists.
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