Markets News Regulators 

Trade war risks becoming a dangerous currency war as China weakens yuan the most in 2 years

“On the surface, the tit-for-tat trade war between the U.S. and China appears to be turning into a currency war” writes unknown author for cnbc.com. But some market pros believe if trade wars begin to impact the economy, the Fed rate hikes will slow down.Strategists said the trade war appears to be moving toward a currency war, but whether it becomes one has yet to be seen.Trump told CNBC that trade partners are “making money easy and their currency is falling.”.  Source: cnbc.com Share This:

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An ugly economic lesson from the Nixon era proves why Trump’s criticisms of the Fed are so worrying

“The released Nixon tapes revealed numerous conversations between the president and Burns in which Nixon pressures the Fed chair to keep rates low” writes Bob Bryan for businessinsider.com. Nixon pressured the new Fed chairman to keep interest rates low to help maintain lower unemployment. “While inflation expectations are currently well anchored, history shows us that a pervasive lack of central bank independence can rapidly, and without warning, lead to rising inflation and economic instability.”.  Source: businessinsider.com Share This:

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News Regulators Stocks 

Stocks aren’t ignoring Trump’s Fed, EU, and China comments. Wall Street’s just watching the dollar get crushed

“As measured by the ICE U.S. Dollar Index DXY, -0.59% the dollar is down 0.6% at 94.620, on track for its worst one-day decline this month” writes Mark Decambre for marketwatch.com. U.S. stocks were edging higher late-morning Friday, seemingly ignoring recent comments from President Donald Trump, who questioned the strategy of the the Federal Reserve and monetary policies of the European Union and China.Futures for all three benchmarks indicated that stocks would face stiffer headwinds at the open of regular trade.However, a weaker dollar, which can benefit large, multinational companies…

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Trump amps up criticism of Fed interest rate rises

“WASHINGTON, July 20 (Reuters) – U.S. President Donald Trump on Friday dug in on his criticism of the Federal Reserve’s policy on raising interest rates, saying it takes away from the United States’ “big competitive edge,” and lamented the strength of the U.S. dollar” writes Aol Staff for aol.com. Trump had already criticized the Fed’s interest rate policy in an interview on CNBC on Thursday, saying he was concerned higher rates could impact the U.S. economy.RELATED: 13 US housing markets that would be most affected by rising interest rates Representatives for…

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The Finance 202: Trump’s Fed comments could backfire

“In 1990, he became undersecretary for finance at the Treasury Department, serving under then-Treasury Secretary Nicholas Brady” writes Tory Newmyer for washingtonpost.com. Thus far in the burgeoning trade war, the U.S. has slapped tariffs on just $34 billion of Chinese products, which China met with retaliatory duties.As he said he considers [Powell] a very good man and that he is not interfering with Fed policy decisions.” That marked the third time this week the administration tried to revise remarks Trump made off the cuff. Source: washingtonpost.com Share This:

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Trump did a bunch of stuff to strengthen the dollar; now he’s upset about the strengthening dollar

“And yet, both his tax cuts and trade war are contributing to these dynamics” writes Jared Bernstein for washingtonpost.com. He’s annoyed that the Fed is raising rates and that the stronger dollar is making our exports less competitive. Whine as you might, you can’t have a “great economy” closing in on full employment, an independent Fed, a big tax cut, a trade war — and a falling dollar.The figure below, an index of the value of the dollar against a basket of foreign currencies, shows the dollar beginning its most…

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News Regulators Stocks 

Stocks rise as strong earnings outweigh Trump’s comments on trade

“Stocks rose on Friday as strong quarterly results from some of the largest U.S. companies counterbalanced comments made by President Donald Trump about trade with China” writes John Melloy for cnbc.com. The S&P 500 traded 0.1 percent higher, with tech outperforming.Wall Street has high expectations for this earnings season, with analysts expecting earnings growth of 20 percent, FactSet said. Source: cnbc.com Share This:

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Policy Daily Review July 20, 2018

Policy Daily Review for July 20, 2018 CME Group FedWatch Tool’s December rate hike odds ease to 53% after Trump comments According to the CME Group FedWatch Tool, markets are now pricing a 53.2% probability of a 25 bps rate hike in December compared to 56.2% seen on Wedn   EUR/USD: Muted reaction expected from next week’s ECB meeting – Rabobank Next Thursday is the European Central Bank meeting. According to analysts from Rabobank, the ECB policy is largely set for the next year or so, and wi   Australian…

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Futures Markets News Regulators 

Gold steadies within correction territory after Trump remarks sting dollar

“The dollar index was still up about 0.2% for the week” writes Rachel Koning Beals for marketwatch.com. And now, it was Trump’s latest remarks on a smoldering trade spat that filtered back into financial markets Friday.These markets fell as Trump said he was prepared to impose tariffs on all Chinese goods imported into the U.S. The ICE U.S. Dollar Index DXY, -0.52% was down by 0.2%.A popular fund used to bet on gold’s moves, SPDR Gold Shares GLD, -0.43% was trading around 1.5% lower for the week. Source: marketwatch.com Share This:

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Orrin Hatch threatens curb on Trump trade authority: Wall Street Journal

“Orrin Hatch, the seven-term Utah Republican who heads the Senate Finance Committee, reportedly sent a letter to the White House this week warning President Trump against a continued pursuit of import tariffs that many observers see setting the stage for a full-fledged trade war” writes Managing Editor for marketwatch.com. According to a Wall Street Journal exclusive, the letter from the reliable Trump ally, who in January announced his retirement, suggests he’d throw his weight behind legislation to rein in presidential trade-policy authority unless Trump changes course. Source: marketwatch.com Share This:

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