Russia pressure is a theme for Pres.Trump and WH NEC Hassett made that clear:
- Trump says Russia sees India as a release valve where they can sell “its stuff”.
Additional tariffs will be added to countries if they deal with Russia. India has been an importer of Russian oil and Trump wants that stopped as a way to force Russia toward peace with Ukraine.
In other comments Hassett says
- The Fed has moved with the weakness in the data and that is troubling
- could wonder whether the Fed are putting politics ahead of their actions.
- Trump highest priority is Fed independence.
- Noted that on the Fed Board, the one thing is the Dems voted one way, and the Republicans voted the other way. It seems political and should be focusing on dual mandate.
- Job of the Fed chair is to drive a nonpartisan board
- says Kevin Warsh is right about that and it’s time for a regime change
- On Pharma says drug companies have monopolies.
- Trump is not aiming to hire people to give data he likes
- Likely to hear about a new factory from Apple. Will likely also here from Apple on a investment commitment today
Hassett and Kevin Warsh (the two Kevins) are on the short list for Fed nominations. Hassett said he like his job, but he would become a Fed Gov. in a skinny minute if given the shot. Speaking of politics, if that is a problem, Hassett would be part of the problem.
Nevertheless, the administration is now looking to discredit the votes of the members by saying they voted along party lines vs the dual mandate and their perception of the economy and where rates should be in relation to that.
Could the Fed ease? Sure. Policy is moderately restrictive. Does it need to be restrictive? Possibly depending upon your view on inflation and employment.
Is the economy weaker this week than it was last week at this time from the data? Yes. the jobs data did tell a different story.
Has the rates come down? Yes the Fed is only in charge of one rate (the short term Fed funds target rate), but other rates have come down reflective of the weaker data. The 10-year yield has come down from around 4.40% to 4.20%. The 2-year yield has come down from about 4% to 3.72%. Until the data from last week, the market was unsure about the direction of the dual mandates. The market has priced two cuts between now and the end of the year since then.
The 30 year mortgage rate moved up down from 6.83% to 6.77% this week. The president should criticize the banks for keeping the mortgage rate too high given the 20 basis point decline in the 10 year yield over the last week while lowering the mortgage rate only by six basis points.
This article was written by Greg Michalowski at investinglive.com.