Trump's attack on Fed crossed 'red line' for markets, could weaken dollar

Section:

By Patti Domm
CNBC, New York
Monday, August 20, 2018

The dollar fell to the day's lows and could continue to weaken after President Donald Trump said he disagrees with the Fed's decision to raise interest rates and that the Fed should do "what's good for the country."

Trump's latest criticism of the Fed, in an interview with Reuters, comes four days before Friday's much anticipated speech by Fed Chair Jerome Powell at the Fed's annual Jackson Hole Symposium. ...

... Dispatch continues below ...



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"The market is going to react to it, not so much in the fed funds futures on the idea that the Fed will change its view, but on the dollar because of the idea of Fed encroachment," said Marc Chandler, head of foreign exchange strategy at Brown Brothers Harriman. "I'd say the dollar is already correcting, and Trump's comments likely prevent it from having a turnaround Tuesday." ...

Trump has previously made it clear he does not like a strong dollar because it hurts U.S. exports. In the Reuters interview, he repeated claims that China artificially lowered its currency and that Europeans were manipulating the euro.

"This is about using the presidency as a bully pulpit," said Chandler. "This is like a red line for the market — the Fed's independence."

... For the remainder of the report:

https://www.cnbc.com/2018/08/20/trumps-attack-on-fed-crossed-red-line-fo...

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