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Trump demands actions from the Federal Reserve

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The effects of Black Monday are still felt throughout the world, so countries must react. Governments work in a hurry to get solutions that build trust in investors once again. However, this does not seem to be enough for Donald Trump, who has criticized the slow pace of action of the Federal Reserve (EDF) in the Tweet of today.

The day after the collapse: Trump’s response

Yesterday represented one of the most important milestones since the appearance of Coronavirus earlier this year. After what happened was predicted several weeks ago: the steep decline in international financial markets. This implies a blow to the United States, causing Trump’s comments today.

It was motivated by two simultaneous and closely related factors.

On the one hand, the lack of an agreement between Saudi Arabia and Russia to decrease oil production. This phenomenon was so volatile because of the sensitivity of the situation. Considering that the reduction in demand generated by the Coronavirus threatened to bring down the price of crude oil.

On the other hand, the increasingly rapid advance of the Coronavirus in the western world. Which threatens to seriously affect the world economy. Disrupting the global supply chain, and therefore leading to a significant decline in economic activity. As expected, Trump has to react to this.

All this led to the collapse of the financial market yesterday. Therefore, to the rapid action of the Federal Reserve of the United States. Which injected money into the economy in an attempt to generate greater confidence in investors. What does not seem to be enough for the President of the United States, Donald Trump, who tweeted today:

Our pathetic and slow Federal Reserve, headed by Jay Powell, who raised rates too fast and fell too late. It should make our interest rate fall to the levels of our competing nations. Now they have up to two points of advantage, with even greater monetary aid. Also, stimulate! ”

The relationship between Powell and Trump has been complicated since his appointment at the head of the Federal Reserve.
Director of the Federal Reserve of the United States, Jay Powell.

Thus, President Trump would be demanding from the Fed, that in the face of the ravages caused by the Coronavirus, cut interest rates in the country. Thus generating a stimulus to investment and consumption. Therefore, driving economic growth at a time of great uncertainty.

It remains to be seen if the Federal Reserve will heed Trump’s demand, or maintain his current position.



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