Mainstream Media Joke of the Week: “Trump Tanked the US Dollar”
by Mish
Numerous mainstream media reports were all over Trump’s statement, attributing major moves in the US dollar to Trump’s statement.
Now that the dust has settled, let’s recap some headlines and look at what really happened on Wednesday, April 12.
April 12 Headlines
- CNBC: Trump tanks the dollar after saying it’s ‘getting too strong’
- CNN Money: U.S. Dollar Drops Sharply After Trump Calls it ‘Too Strong’
- USA Today: Trump says ‘Dollar Too Strong,’ Pushes Buck Lower
US Dollar Index
The US dollar fell from 100.71 to 100.46. That’s a 0.25% move. Allegedly that constitutes “tank” and “sharply lower”.
April 16 US Dollar Index Update
Watching the futures, the index is now at 100.30 as of 8:11 PM central.
If you insist on attributing that follow-through to Trump, the index is down 0.41% since Wednesday, April 12.
Can the President Move the Dollar?
If Trump unexpectedly bombed Germany, Japan, or China there would be a major move of some sort in the dollar.
But other than major unexpected action, the president cannot do much. Jawboning is unlikely to do anything at all, as we have just witnessed.
Actions, Not Words
Given the Fed has all but promised three rate hikes this year, the dollar is highly likely to head south if those hikes do not take place.
Meanwhile, the yield curve is sure acting as if economic weakness, not a strengthening economy is at hand.
Trump has nothing to do with that picture either.
Economy Sputtering
It’s obvious the economy is sputtering unless you happen to believe soft indicators more than hard data.
So, if the dollar falls, and that is highly likely, don’t credit Trump and don’t listen to mainstream media nonsense.
My first quarter GDP estimate sits at 0.4% (see link #1 above). We will have an advance estimate from the BEA on April 28.
Mike “Mish” Shedlock