Just two days before a Federal Reserve interest-rate decision, President Donald Trump on Monday urged the Fed to “take the victory,” his latest bid to influence the ostensibly independent central bank.
‘TAKE THE VICTORY’
Trump’s missive toward the Fed made the case that the U.S. economy had a “very strong dollar and virtually no inflation.” To emphasize Trump’s point, White House trade adviser Peter Navarro went on CNBC and argued that the Fed shouldn’t increase interest rates on Wednesday due to the lack of inflation.
Trump’s tweet alluded to the slowing of global growth, noting both the violence in France as well as “China way down.”
As Trump’s tweets go, its accuracy rates high.
The dollar indeed has been strong, with the WSJ Dollar Index BUXX, -0.33% up over 5% this year. That strength has contributed to emerging-market turmoil, for China in particular, as well as Trump’s own fight over tariffs.
Trump previously has linked his trade fight with Fed policy, telling Reuters last week, “We’re fighting some trade battles and we’re winning. But I need accommodation too.”
As for inflation, both the headline PCE index as well as the core have backed away from summertime highs, and market-derived inflation expectations have plunged. And the so-called yellow vest movement in France drove French purchasing managers index into contractionary levels in December.
The Fed is widely expected to hike interest rates by a quarter point this week but also signal fewer increases in 2019 than it previously did.
U.S. stocks didn’t seem to respond favorably to Trump’s request, with the Dow Jones Industrial Average DJIA, -1.04% down in afternoon action.
Trump also tweeted about two topics in the news, the budget showdown and the Texas court decision invalidating the Affordable Care Act, better known as Obamacare.
Congress and the president have until Dec. 21 to reach a deal or risk a partial shutdown.
Trump said the case for having good security along the border, or “boarder” as he initially spelled it before a replacement tweet was sent, requires a wall.
On the Obamacare ruling, Trump said premiums are so high that “it is practically not even usable.” Average premiums nationally did climb to $481 per month in 2018, up from $359, according to the Kaiser Family Foundation.
Trump said a “confirming Supreme Court decision will lead to great health care results,” though most legal analysts do not expect the high court to affirm the decision.