Demand for Risk Plummets as Trump Orders US Manufacturers Out of China – Yahoo Finance

0
35
views

After China retaliated with fresh tariffs and Fed Chairman Jerome Powell calmed the markets by seemingly opening the door to further rate cuts by saying the central bank stands ready to do what is necessary to support the record-long U.S. expansion on Friday, President Trump lit up the Twitterverse with a series of scathing tweets criticizing the Fed, Jerome Powell and China. But this time, he didn’t stop there, he took action that triggered a steep break in the stock market, while spiking demand for safe-haven assets.

Trump’s Response to Powell’s Speech

After Powell’s speech, Trump tweeted, “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…”

He further added, “….My only question is, who is our bigger enemy, Jay Powel [sic] OR Chairman Xi?”

Trump Attacks China and Orders US Companies to Come Home

Trump continued with his Twitterstorm after meeting with National Economic Council Director Larry Kudlow, Treasury Secretary Steven Mnuchin, China Adviser Peter Navarro and U.S. Trade Representative Robert Lighthizer.

“Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far…,” Trump tweeted.

“….better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing…

…your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States. Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE,….

….all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop – it didn’t. Our Economy, because of gains in the last 2 ½ years, is MUCH larger than that of China. We will keep it that way!”

Markets Response

Trump’s series of tweets damaged investor confidence in the economy, driving the major indexes sharply lower, with their fourth consecutive weekly loss. The blue chip Dow dropped about 1% this week while the benchmark S&P 500 pulled back 1.4%. The tech-based NASDAQ Composite Index lost 1.8%.

The plunge in the stock market set off a flurry of activity in the safe-haven markets. U.S. Treasury yields fell. Also, the yield curve inverted briefly again on Friday, but was mostly flat throughout the day. Gold surged 2% with some of the gains attributed to Powell’s dovish remarks. The Japanese Yen rose to a one-week high.

This article was originally posted on FX Empire

More From FXEMPIRE:

Let’s block ads! (Why?)

Original Post Source link