The U.S. president’s comments fuel the market turmoil

All people lie, but it’s OK, nobody ever listens to each other. Financial markets are listening to Donald Trump very attentively! His lies are so childishly naive that makes investors panic around. It seems that if the U.S. president says something like, “It is not a bald spot, it is just a broad hairline”, they will undoubtedly believe him. Trying to explain the drop in the U.S. stock indexes, the U.S. president has decided to charge the Fed with all misfortunes. It turns out that the central bank is hiking the fed funds rate too often, encouraging the speculators to sell the shares. Excuse me, hadn’t the FOMC plans been known a few months ago? But the S&P 500 correction has started only in October.

There is the turmoil again in the U.S. securities markets. The 10-year Treasury yield broke through the resistance at 3.1% and followed up towards the highest level since 2011. Increased borrowing coasts made investors sell off the shares. There is a draft here, take your money! The current situation couldn’t be described more accurately. After all, Steve Mnuchin believes it to be just a common correction. And Donald Trump claims his team to have been waiting for it since long ago. The U.S. president is just fueling the situation by his speeches. A boy was playing with fire...And he has won! And the U.S. president is far from being a boy; as years are passing, he is doing less and less silly things. But their quality is surely improving!

It is easy to call the Fed mad; far more difficult to understand that such statements reveal your ignorance to the whole world. That is how markets work: consolidations are followed by new trends, and vice versa; so, after the 10-year yield exited the trading range, they quite naturally surged. It hasn’t coincided with the Fed monetary restriction in September also because of the U.S. trade wars. Everybody knows the reasons for them. Donald Trump is not the perfection, of course, but he is definitely an outstanding politician! He seems to have been suffering from insomnia, resulted from the U.S. stock indexes crash, as he has been criticizing the central bank for two consecutive days. My thoughts are popping up like crazy horses. I faced a whole flock before bed...

The president is used to being too much worried about the U.S. stock indexes. Once, he claimed the S&P 500 rally to have resulted from his efficient policy; then, he warned about their crash in case of his impeachment; now, he is criticizing the Fed as soon as the correction occurs. He must know that the more you complain about your life, the more the Gods grow angry. When you tell investors that the central bank is independent, they remember that the democracy is called a mutiny on board. Even if Donald Trump can’t change the Fed’s chairman, he can well make his life unbearable and then find a good team to crash the dollar by their concerted action. That is often so: if there is no one to blame, they are likely to be in the government. And the laws, as a rule, don’t apply to their authors. The USA can afford to change the instruction and officially announce China to be a currency manipulator; but, if Washington drops the dollar down on its own, it will get away with it. So goes the world!

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Price chart of EURUSD in real time mode

Trump Playing With Fire

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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