Former President of NYFED, Bill Dudley, notes:
The Fed Shouldn’t
Enable Donald Trump
“U.S. President
Donald Trump’s trade war with China keeps undermining the confidence of
businesses and consumers, worsening the economic outlook. This manufactured
disaster-in-the-making presents the Federal Reserve with a dilemma: Should it
mitigate the damage by providing offsetting stimulus, or refuse to play along?
If the ultimate
goal is a healthy economy, the Fed should seriously consider the latter
approach.”
Bloomberg’s John Authers notes:
“The presidential
Twitter feed has long provided an insight into Trump’s personality, and most
have disliked what they have seen. But for the most part, it has been possible
until recently to dismiss the missives. Trump’s tweets reveal the president to
be self-obsessed and vain, the argument went, but so what? Other politicians
have similar flaws; the only difference is that they try to hide them.
It’s hard to
dismiss the tweets of the last few days this way. The average professional
investor is not equipped to be a psychiatrist, which makes the problem harder.
But to the layman, Trump appears to have moved from pettiness and vanity to
something more serious. Retweeting with approving comments someone who likened
him to the “King of Israel” and subsequently joking about being the “chosen
one” seems unhinged to many in markets. You can throw in his “ordering” U.S.
companies to boycott China, and speculating about whether Federal Reserve
Chairman Jerome Powell is the greatest “enemy” of the U.S.”
Stephen S.
Roach, a faculty member at Yale University and former Chairman of Morgan
Stanley Asia, notes:
“Despite years of
denial, there can no longer be any doubt that the US is pursuing a bipartisan
containment strategy vis-à-vis China. Whether justified or not, the real
problem with this strategy is less the merits of the allegations leveled by US
politicians than the incoherence of the Trump administration’s policies to
address them.