Home Economy Trump Slams Fed After Market Meltdown: “As Usual, Powell Let Us Down”

Trump Slams Fed After Market Meltdown: “As Usual, Powell Let Us Down”

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Update (1645ET): Well that didn’t take long. We noted previously that Trump demanded a rate-cut – gets one but the dollar soars and stocks tank – who will be blamed for that?

And now the President has responded by slamming Powell who “let us down”, telling his followers that the market wanted to hear 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.”

As @Hipster_Trader pointed out so correctly, “Best economy ever needs lengthy and aggressive rate-cutting cycle…”?

*  *  *

Powell over-promised and under-delivered to a market that will “take a mile when given an inch”…

His comment about an ‘adjustment’ probably means that those looking for an aggressive easing cycle over the next six to nine months are not going to see it. What it means is that there was a divergence between what investors were saying and what they were pricing in.

Investors wanted Powell to say that he’s cutting, but they really wanted to see the Fed embarking on a rate-cutting cycle. The consensus belief on what the Fed would do was correct. It’s just that the markets pricing in an aggressive cycle of rate cuts were way off.” – Matt Maley, equity strategist at Miller Tabak + Co.

“The catalyst for sell-on-the-news was that phrase. He made it explicit — basically, that’s what that phrase means. An insurance cut implied ‘Hey, it’s just an insurance policy. It’s a one-time premium and we’re done.’ And then he made it explicit with that sentence and the market figured it out.”  – Charlie Smith, founding partner and chief investment officer at Fort Pitt Capital Group in Pittsburgh.

And the result… (Is Powell the lady on the rope or Stallone trying to save us all?)

This should help..

China ends the month mixed with tech-heavy ChiNext performing well but the broader Shanghai Comp in the red…

European stocks were also mixed with UK’s FTSE best (as the pound collapsed) and Spain and Germany weakest…

US stocks were all positive on the month with Small Caps worst and Nasdaq best (even with today’s ugliness)…

Bonds and the dollar held gains as stocks and gold sank post-Powell…

This is the 10th time out of 12 press conferences that Powell has done that stocks have tanked – not great!!

VIX spiked up to 16.5 intraday, dipped and then pushed back above 15 into the close…

Credit spreads spiked notably…IG spreads ended the month wider!

Thanks to today’s turmoil in the bond market, 30Y Yields ended the month lower and the short-end higher in yields…

The yield curve (3m10Y) very briefly un-inverted but tumbled on the day – staying back inverted…

And the 2s30s curve crashed most since Brexit (June 2016)…

The dollar surged 2.5% in July – its biggest monthly gain since Nov 2016 (Trump election)

Cable crashed over 4% in July – its worst month since Oct 2016 – with the lowest monthly close since 1985

Bitcoin bounced back above $10,000…

But cryptos have been ugly on the month…

Commodities were broadly lower today as the dollar spiked but Silver massively outperformed for the month…

Silver surged back above $16 intra-month – its best month since Dec 2018…

And this was silver’s best month relative to gold since Brexit (June 2016)

Finally… Trump demanded a rate-cut – gets one but the dollar soars and stocks tank – who will be blamed for that?

And what happens next?

via zerohedge

2 COMMENTS

  1. THE FED
    Did you know that The Federal Reserve Bank is neither federal nor do they have a reserve? Do yourself a favor and read “Jackals at Jekyll” by Richard C Sizemore. There is absolutely no authority in the Constitution to establish a central bank, and in fact its stated objective was to stabilize the economy and prevent bank panics. It has done neither. In 1836, Andrew Jackson labeled the bankers a den of vipers. Congress has zero control over the Fed, which is totally unconstitutional. Since its inception in 1914 the dollar has been reduced to a dime and the economy has been anything but stable. The USA does NOT own the Fed, however, the taxpayers are obligated for its notes. The Fed is the biggest scam this country has ever known. Ownership is shrouded in secrecy, so it is hard to tell exactly who owns it. The only one I know that is speaking out against it today is Senator Rand Paul. Apparently it is dangerous to speak out against the bankers. Andrew Jackson and Ronald Reagan were subjected to an attempted assassination, while Abraham Lincoln, James Garfield, and John F. Kennedy, were assassinated. All spoke out against the Fed.
    * The Fed is not organized within the Executive, Legislative or Judicial branches of our government.
    * Who pays the Fed’s bills and determines its budget? Not any part of our government. The Fed gets its funding from its own specially privileged operations. The Fed Board determines Fed budgets.
    * Who monitors and oversees Fed activities? Again the Fed itself. While some important elements of proper auditing have taken place, there has not yet been a comprehensive independent audit, by the Government Accountability Office as proposed in a recent letter from Ralph Nader to new Fed Chairman Ben Bernanke, calling for greater monetary transparency.
    * Federal Reserve Employees are not part of the US Civil Service System and are not covered by government employees’ health insurance or pension programs. Who does the hiring and firing? Except for the highly publicized Chairman and 7 member Washington Board, this is in private, unelected hands.
    * Federal Reserve Banks are not listed as government organizations by the telephone companies, a small but telling fact.

  2. WHEN IT COMES TO ECONOMICS TRUMP WINDS UP DOING STUPID THINGS. IT IS NO WONDER THAT AMERICAN BANKS WILL NOT LOAN HIM ANY MONEY AND WITH HIS CONTINUING ESCALATION OF TARIFS THE PRIME LOSERS WILL BE THE AMERICAN PEOPLE BECAUSE ALTHOUGH SALES OF CHINESE PRODUCTS WILL BE LESS, THE COST TO THE CONSUMER WILL BE MORE. ON TOP OF THIS HE WILL HAVE TO OBTAIN TAX MONEY TO FUND THE FARMERS WHO HAVE LOST BILLIONS OF DOLLARS DUE TO NOT BEING ABLE TO SELL THEIR PRODUCTS, MAINLY MEAT & GRAIN.

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