President Donald Trump's attacks on the Federal Reserve spooked the stock market on Christmas Eve, and efforts by his Treasury secretary to calm investors' fears only seemed to make matters worse, contributing to another day of heavy losses on Wall Street.
The major stock indexes fell more than 2 percent Monday, nudging the market closer to its worst year since 2008. Stocks are also on track for their worst December since 1931, during the depths of the Great Depression.
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The past two trading days, however, have been dominated by something else: major losses following tweets from the president criticizing Fed Chairman Jerome Powell and the central bank.
Trump's Monday morning tweet heightened fears about the economy being destabilized by a president who wants control over the Fed.
Peter Conti-Brown, a financial historian at the Wharton School of the University of Pennsylvania, said: "We've never seen anything like this full-blown and full-frontal assault. This is a disaster for the Fed, a disaster for the president and a disaster for the economy."
On Sunday, Treasury Secretary Steven Mnuchin made a round of calls to the heads of the nation's six largest banks in an attempt to calm jitters, but the move only raised new concerns about the economy.
So a financial historian from Donnie’s Alma Mater says he’s a disaster.
Anyone need any more evidence?
“Mnuchin is just play-acting,” says one investment strategist. “It looks like he was instructed to go out and do something, and he jumped on the first thing he thought of.”
The panic right now seems to come not from the market — which is indeed operating so far as it should — but from the Treasury Secretary, responding to the President.
Meanwhile, how does one idiot fire another idiot?
Trump has weighed dismissing Mnuchin: Bloomberg
President Trump has weighed dismissing Treasury Secretary Steven Mnuchin, a source familiar with the president's thinking told Bloomberg News.
Another source told Bloomberg said that Mnuchin's future at the helm of the Treasury Department depends on whether the market continues to drop.
Trump's unhappiness with his treasury chief was reported the day after Mnuchin released a statement seeking to reassure financial markets as stocks continued to plunge. Mnuchin's statement came following reports that Trump was considering firing Federal Reserve Chairman Jerome Powell.
Many economists warned that President Trump’s focus on the stock market could have painful consequences. In recent days, it has become apparent why. Trump and his top deputies are focused on trying to stop the market slide, but they are helping drive the market down even further.
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“If you wanted to create financial market volatility, this is how you would do it. Why a Treasury Secretary is in that game is beyond me,” tweeted economist Justin Wolfers, echoing the sentiment of many economists and traders.
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“There were already fires burning in the financial markets and the economy that are related to uncertainty. This simply pours jet fuel onto that uncertainty quotient,” said Mark Hamrick, senior analyst at Bankrate.
And from Fox News (yes, THAT Fox!!!)
Trump's Fed comment: Adding fuel to the fire of one of the ugliest stock market tapes in years, Hedge Fund manager says
Dec. 24, 2018 - 5:12 - CapitalistPig Hedge Fund Manager Jonathan Hoenig on the impact of President Trump's criticisms of the Federal Reserve on an already difficult year for the markets.
Trump attacking the Fed as he's done is really unprecedented: Former Reagan Assistant Press Secretary
Dec. 24, 2018 - 6:08 - Former Reagan Assistant Press Secretary Mark Weinberg on President Trump's criticisms of the Federal Reserve and the impact of Federal Reserve policy and Trump's messaging on the markets and economy.
Trump Renews Attack on Fed as Mnuchin Tries to Calm Markets
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With a single tweet on Monday, President Trump undercut his top economic advisers’ efforts to reassure the markets that he did not intend to fire Jerome H. Powell as Fed chairman. But Mr. Trump, who blames the Fed’s recent interest rate increases for the market gyrations, said “the only problem our economy has is the Fed,” an assertion that exacerbated the worst sell-off on Wall Street since the 2008 financial crisis.
“It signaled a sense of panic and anxiety that didn’t need to be there,” said Brian Gardner, an analyst at the investment banking firm Keefe, Bruyette & Woods. “My first reaction when I heard it was, what has happened over the last couple of days that the market does not understand or realize? Is there something that Treasury knows that the rest of us don’t?”
And while Mr. Mnuchin and Mr. Mulvaney tried to reassure markets on the Fed’s leadership, there is still an effort within the White House to discern whether any legal rationale exists for removing Mr. Powell from the chairman spot, according to two people familiar with the discussions.
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On Monday, Senator Jeff Flake, the retiring Arizona Republican, posted a photograph on Twitter of a 5-billion-dollar bank note from Zimbabwe and urged the president to back off.
“I’ve lived in countries where the Head of State has used the central bank for political purposes,” he said. “Please respect the Fed’s independence, Mr. President.”
Then Trump attacked the Fed and made it ten times worse.
Hey, rich R-donors? Do you believe us now that Trump is a fucking moron???