President Trump Sees USD Too Strong, Cites Fed Policy

President Trump Sees USD Too Strong, Cites Fed Policy

$DIA, $QQQ, $SPY, $RUTX, $VXX

The White House declared Tuesday that President Trump believes USD is too strong, and EUR is too weak, that he feels the situation could be eased if the Fed lowered interest rates sooner rather than later.

Further, that White House had no plans to demote Fed Chairman Powell, adding that there were different views within the White House counsel’s office regarding the President’s authority to do so.

President Trump is expected to underline US economic gains in his Y 2020 re-election bid hammers Fed policy and said other countries are using monetary polity to manipulate their currency and gain advantage over the US in the global markets.

President Trump tapped Mr Powell to lead the Fed, but has repeatedly and publicly criticized him on his management of the central bank.

President Trump is expected to interview several candidates for other open seats at the Fed after he returns from his upcoming trip to the G-20 Summit in Japan this weekend

Fed Speak Tuesday

St. Louis Fed President James Bullard (FOMC voter), the lone dissident in this month’s FOMC meeting, said he did not think it was necessary to cut the fed funds rate by 50 bpts. Instead, he favored a 25 bpts reduction, viewing it as an “insurance” cut.  Mr. Bullard is 1 of the Fed’s most vocal Doves

Fed Chairman Powell went on to temper the market’s hopes for a 50 bpts cut next month Tuesday, when he reminded the market that monetary policy should not overreact to any individual data point or short-term swings in sentiment. 

The US Dollar Index (.DXY) increased 0.2% to 96.16

Tuesday’s Economic Data

  • The Conference Board’s Consumer Confidence Index fell to 121.5 in June (Briefing.com consensus 132.0) from a downwardly revised 131.3 (from 134.1) in May. The index is at its lowest mark since September 2017.
    • The Key takeaway from the report is that it reflects growing concern about trade tensions among consumers that had been previously lacking, but which had been showing up in business confidence surveys. Flagging confidence on the part of businesses and consumers alike, if it is sustained, is an adverse development for the growth outlook.
  • New home sales declined 7.8% M-M in May to a seasonally adjusted annual rate of 626-K (consensus 683-K) from an upwardly revised 679,000 (from 673-K) in April.
    • The Key takeaway from the report is that demand was relatively soft despite a drop in mortgage rates and a 2.8% Y-Y decline in the median sales price of $308,000.
  • The FHFA Housing Price Index for April increased 0.4% (consensus 0.2%) following an unrevised 0.1% increase in March.
  • The S&P Case-Shiller Home Price Index for April increased 2.5% as expected after increasing a revised 2.6% in March (from 2.7%).

Tuesday, the major US stock market indexes finished at: DJIA -179.32 at 26548.22, NAS Comp -120.98 at 7884.71, S&P 500 -27.97 at 2917.38

Volume: Trade on the #NYSE came in at 878-M/shares exchanged

  • NAS Comp +18.8% YTD
  • S&P 500 +16.4% YTD
  • Russell 2000 +12.8% YTD
  • DJIA +13.8% YTD

HeffX-LTN’s overall technical outlook for the major US stock market indexes is Neutral to Bullish with all 3 Key indicators flashing Very Bullish in here.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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