From Investor's Business Daily · ED CARSON · · 1m
Trump Wants Cuts, The Market Wants A Hike
The president is pushing the Fed to go lower this week, while traders are positioned for the opposite.
In brief
The president is pushing the Fed to go lower this week, while traders are positioned for the opposite. Presidential pressure does not move the Fed when oil and bond yields are pointing the other way. Originally reported by Investor's Business Daily.
Trump renews the rate push
Speaking to reporters in Ireland on Sunday, the president repeated his demand that the Federal Reserve lower interest rates.
Markets bet the other way
Traders are largely positioned for a rate hike at this week's meeting, the opposite of what the White House is asking for.
Crude is the pressure point
Surging crude oil prices feed straight into inflation, which is the case for tightening rather than easing.
Yields are climbing too
Rising Treasury yields say the bond market has already priced in higher rates, no matter what the Fed announces.
Strength over formulas
Trump's argument is not about models or inflation data. It is that a strong country should simply pay the cheapest rate going.
“The United States is so strong, we should be paying the lowest interest rate in the world, regardless of their formulas”
In short
Presidential pressure does not move the Fed when oil and bond yields are pointing the other way.
