Trump Flips On Five Core Key Campaign Promises In Under 24 Hours

Cross-posted from Zero Hedge

Blink, and you missed Trump’s blistering, seamless transformation into a mainstream politician.

In the span of just a few hours, President Trump flipped to new positions on several core policy issues, backing off on no less than five repeated campaign promises.

In a WSJ interview and a subsequent press conference, Trump either shifted or completely reversed positions on a number of foreign and economic policy decisions, including the fate of the US Dollar, how to handle China and the future of the chair of the Federal Reserve.

Goodbye strong dollar and high interest rates

In an announcement that rocked currency markets, Trump told the WSJ that the U.S. dollar “is getting too strong” and he would prefer the Federal Reserve keep interest rates low.  “I do like a low-interest rate policy, I must be honest with you,” Mr. Trump said. “I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me. But that’s hurting—that will hurt ultimately,” he added. “Look, there’s some very good things about a strong dollar, but usually speaking the best thing about it is that it sounds good.”

Trump then said the one thing that every other currency manipulator realizes all too well: “It’s very, very hard to compete when you have a strong dollar and other countries are devaluing their currency.

During his campaign Trump had repeatedly said that a “strong dollar” policy would be beneficial for the US economy, despite our repeat warnings that he will inevitably reverse on this, especially if and when the “Goldman” circle of advisors starts providing macroconomic advice.

It is unclear if the shift in Trump’s policy will mean that US economic data will now “mysteriously” begin to deteriorate to justify not only his request for a weaker dollar, but to also hit the breaks on Yellen’s plans for further rate hikes over the next 2-3 years. In any case, the debate over the Fed’s balance sheet unwind, and the trajectory of Fed hikes, is now on indefinite hiatus.

The biggest loser here, again, are America’s savers who may have been hoping that their bank deposits will finally earn some interest.

As for the most notable outcome from this Trump statement, is that it counters his “desire” for a weaker dollar with the Fed’s tightening bias. Will fireworks fly as Trump realizes that Yellen’s actions are prompting the strong dollar? Stay tuned for what may be the most entertaining clash yet: Trump vs Yellen

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2 thoughts on “Trump Flips On Five Core Key Campaign Promises In Under 24 Hours

  1. One needs to find personal ways to take advantage of a “Realpolitik” situation.
    In our case, we needed to replace a 19-year-old vehicle and two “realities” converged in our favor: Automakers have a huge inventory glut and savings accounts will gradually shrink in current dollar valuations.

    So, we bought our vehicle on a four year, zero- interest loan, nothing down, even the licensing and tiling fees financed.

    Savings will be drawn down to make the payments.

    Like

  2. I should add; the key word above is “need”.

    Need for the spending is greater than need for liquidity in spite of deflation.

    Like

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