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Donald Trump gives US Fed thumbs-up
15-07-2020 16:08
Donald Trump gives US Fed thumbs-up
Donald Trump gives US Fed thumbs-up

US President Donald Trump who used to be a fierce critic of the Federal Reserve and its leader Jerome Powell softened his tone. No one knows what exactly inspired Donald Trump to shift to praise. Perhaps, this is a deliberate effort as part of his presidential campaign. Probably, the President was in a benevolent mood while being interviewed by Fox Business Network. In fact, the most plausible reason is that the US central bank with Jerome Powell at the helm deserved a thumbs-up from the state leader for wise and efficient policy moves. Once, Donald Trump nominated Jerome Powell as the Fed’s Chair. Since then, the President targeted the policymaker for his hawkish stance on monetary policy and a series of rate hikes in 2018. Moreover, Donald Trump used to send a clear message that he would prefer the urgent resignation of the Fed’s Chairman.          “I didn’t talk about it. The media did,” the President said answering the question about his ideas of firing Mr. Powell. “I would say that I was not happy with him at the beginning and I am getting more and more happy with him. I think he stepped up to the plate. He’s done a good job," said Trump during an exclusive interview with Fox Business' presenter Blake Burman. Besides, the President said he was satisfied with the performance of Treasury Secretary Steven Mnuchin. Thanks to their joints efforts, the stock market is almost at the same state as it was before the pandemic. Donald Trump pointed out that the Fed managed to saturate American markets with enough dollar liquidity. Nevertheless, Donald Trump evaded the question about whether he would keep Mr. Powell for a second term.  

Looking back, Trump’s tone marked a shift from harsh criticism to approval in March when the central bank slashed interest rates to zero as a measure to prop up the national economy during the crisis. Moreover, the US regulator launched a range of emergency stimulus program to provide state authorities and businesses with easy loans. Those prompt moves ensured low borrowing costs and kept the financial system liquid in the time of havoc.          

 

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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