Economists expect the ECB to cut rates further into negative territory on Thursday.
The Fed is expected to cut rates a quarter of a point on September 18.
In the past week the Fed has jawboned against multiple cuts.
Market participants responded by reducing their bet on a 50 basis point cut a week ago to an 11.2% chance of doing nothing today.
I somehow sense that Trump is not particularly happy about this state of affairs.
There will be more howls tomorrow if the ECB takes the expected rate cut action.
Irony of the Day
Trump is correct. The Fed are proven boneheads. But Trump’s requested action would increase the boneheadedness.
Keeping rates too low too long blows bubbles. We we are in the midst.of the third major bubble in 20 years.
Besides, and as I have stated many times, there should not be a Fed in the first place to make such decisions.
Question of the Day
Today it’s “Naive Boneheads”. What will Trump call the Fed in his next Tweetstorm?
Bonus Poll Question
Trump Calls Jerome Powell and the Fed “Naive Boneheads”
Question of the Day
What will Trump call the Fed if the ECB cuts tomorrow?Bonus Poll Question
Did Trump correctly spell the French word naïveté or did someone type that Tweet for him?https://t.co/wpVIaSu3YP— Mike “Mish” Shedlock (@MishGEA) September 11, 2019
Did Trump correctly spell the French word naïveté or did someone type that Tweet for him?
Mike “Mish” Shedlock
….Even broken clocks…..
I more and more think that Trump’s attacks are sabotaging the Fed’s easing. The Fed needs to be / pretend to be ‘independent’, so they can’t just follow Trump’s calls. So this makes it harder for the Fed to do massive easing because then it looks as if they are not independent. The question is whether it is accidental or Trump does it on purpose. He also proposed gold standard Judy Shelton for the Fed’s board, and before her two other fan’s of gold. Time will tell what he is really up to. link to qz.com
The contradiction here is that no one who plans to spend beyond their means would support a gold standard.
Shelton herself is a contradiction in that she supports rates going to zero. WTF?
Mish, perception is reality. If the mob perceives the Fed to be in control, then they are in control. The entire economy is a confidence game. As long as the lender of last resort can ride into town and re-establish confidence in the system, they will continue to rule.
Push dat string, Donald. Can you imagine what he’d do if someone told him robust government spending that benefits the broad majority would pack many times more punch than his tax cuts for ultra rich gigantic corporations?
It wasn’t “naïveté”, he just misspelled the word covfefe.
The US deficit exceeds GDP by at least 4%. The long bond is around 2%. At those rates, my quick PV calculation tells me that for every $1000 the US borrows for 30 years it is paying back a total of about $650 in today’s dollars.
Considering the US is a debtor nation that shows no signs of becoming more fiscally responsible, President Trump and the US Treasury should be very happy with those financing terms. The President is being an idiot when he complains about this.
I meant to write “US deficit is at least 4% of GDP.” In other words, excess money created vs. GDP is at least 4% each year. My initial statement, “deficit exceeds GDP by at least 4%” was accidentally misstated.
“I somehow sense that Trump is not particularly happy about this state of affairs.”
…
A few weeks ago The Washington Post ran a story on an internal report circulating the White House early August on economy slowing (but no recession) before election. DJT may be crazy, but he is no dummy.
Re election – “It is the economy, stupid”
Trump staking out the high ground. Been pounding on Powell all year … if economy tanks its HIS fault.
“It is the economy, stupid” applies to normal Presidents.
When it comes to Trump, there is no reason and no economy that should result in him getting re-elected. Trump is a pimple that needs to be squashed. PERIOD.
So voters will go to the polls with a choice to vote Powell out of office? Or Trump?
Haha, this is awesome! I want more!
I am amazed that so many professional grown men, who are likely financially secure for life, put up with this, and don’t just give him the finger and leave.
You have obviously not visited Washington DC.
First, there are no grown men (or women). They all run around with a giant entourage of personal assistants who fetch, do and carry every little whim.
Second, they tolerate this because they are not qualified to hold a real job. Most of them are second or third rate lawyers. They have no chance of getting a private sector job that would pay them the perks and privileges they take as public servants.
No one was stupid enough to pay Bernanke or Yellen six figures per speech when they were private sector. The speaking fee is a bribe they can only collect by being part of the system.
PS — the Goldman guys who take public sector jobs are required to sell their stock portfolio to eliminate conflicts of interest. They are allowed to do so TAX FREE because it is required by the job. That is why they smile
The other perk is that certain jobs can only be filled by Goldman guys.
Did Trump even know “naivete” was a word?
He obviously has someone (an English speaking female, obviously not a wife) help him with this tweet.
When the president talks like a Peanuts character…. I guess he does have the correct shape.
Well, Trump is right on the first part… the Fed are a bunch of boneheads.
But then Trump is a bonehead to think more price manipulation and more central planning is somehow going to get the economy moving again.
Bonehead leading other boneheads
Below market interest rates are not a solution for too much debt, they are the cause
CB, it is scary, the “war of the BONEHEADS.” There must be a meme in this somewhere.
“Did Trump correctly spell the word “naïveté” or did someone type that Tweet for him?”
LOL
Auto correct tech is getting better
The French don’t even have a word for entrepreneur!
Boneheads.