Source: Tyler Durden
Moments after J-Powell’s J-Hole speech hit, we summarized our longish take as follows: in the aftermath of Trump daring the Fed to “show their stuff”, Powell did not do that and instead…
We didn’t have long to wait, because with stocks unsure initially how to respond – they eventually did trade in the green as algos convinced themselves that Powell’s speech was more dovish than hawkish or just because shorts were forced to cover once again – Trump who was expecting much more from Powell, apparently he was hoping for a 100bps rate cut announcement or at least “some QE”, the president lashed out at Powell, and blasted on twitter:
As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great. My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?”
It was not immediately clear what Trump was referring to by Powell not knowing what Trump “is doing”, or what he will announce shortly.
However, it is ironic that after stocks eventually hit session highs just before Trump’s tweet, they have since drifted lower, even as yields and the dollar slump, while gold is soaring. In other words, if stocks end up dropping now, and if Trump is looking for a culprit for today’s market action, he should look in the mirror.