VS-president Trump bekritiseerde gisteren op de renteverhogingen van de Fed. Bart Hordijk, valuta-analist bij Monex Europe: “Dit kan de vraag oproepen of de Fed nog wel onafhankelijk kan zijn onder deze president. Gaat de VS Turkije achterna, of valt het allemaal nog wel mee?”
President Trump did something yesterday that usually only happens in emerging market and developing countries. He questioned one of the most holy axioms of modern economics; central bank independence. He said he is “not thrilled” by the Federal Reserve’s recent rate hikes and added “I don’t like all this work we have been putting in the economy and then I see rates going up”. The US dollar sold off across the globe and the question on every FX trader’s mind is; is the US becoming the new Turkey?
The answer seems, “no, but….”. The Turkish lira lost almost 30% of its value this year mostly because Turkish President Recep Erdogan is firmly set against higher rates (just like Trump) and is attacking the independence of the central bank (just like Trump). The big difference however is that the institutions in both countries widely differ and there are miles more of legal obstacles and checks and balances in place before Trump even gets close to have a direct say in the Fed’s interest rate policy. Additionally Erdogan seems surrounded by a group of yes men, while Trump’s team sometimes still keep him in check, as evidenced by Deputy Press Secretary Sarah Sanders who went into damage control mode after the comments were made and reconfirmed Trump respects the independence of the Fed.
The dollar sell-off therefore seems justified nevertheless, not because it shows that Trump will be able to really influence the Federal Reserve’s policy (unlikely), but more because it shows how far his meddling goes in things he doesn’t seem to fully grasp. After starting a trade war, giving tax hand outs to the rich that will likely blow up the US fiscal deficit and antagonizing NATO allies while befriending despotic leaders, this latest action of Trump further establishes the pattern of his capricious, often short term focus. That in itself is a scary observation and an understandable reason why the dollar sold off.
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