Trump Blames Powell: “I Think The Fed Has Gone Crazy” After Selloff
President Trump has been briefed on the market sell off this afternoon. A senior White House official gives me this comment now: “This is a bull market correction. It’s probably healthy. This will pass and the US economy remains strong.”
So who was behind the selloff: deleveraging risk parity funds? Selling CTAs? A wholesale derisking into a higher interest rate environment. Or… could it be China, with its $1.5 trillion in reserves sending Trump a clear message what could happen if Trump continues to unleash hell in Beijing’s general direction?
While it is unlikely that the culprit will be revealed, there is nothing that would prevent Trump from pushing the former narrative and blaming Beijing for today’s rout.
That said, there is one more person who should be rather nervous after the plunge: recall that exactly 24 hours ago Trump said that he doesn’t “like what the Fed is doing.” What better justification could Trump have to “push” Powell than to accuse him of the second worst selloff of 2018?
Indeed, as one notable fintwit member said, a little more downside in the S&P, “and Powell can start putting his coffee cups and pencils in a cardboard box.”
Another 2% down in spoos and Powell can start putting his coffee cups and pencils in a cardboard box