Topline: Speaking at the Economic Club of New York on Tuesday, President Donald Trump criticized the Federal Reserve, touted the health of the U.S. economy and spoke about international trade—particularly on China, calling the nation “cheaters.”
- As markets anxiously await news on the signing of a phase one trade deal with China, Trump admitted that it “could happen soon,” while also saying that “their supply chains are cracking very badly and they’re dying to make a deal.”
- Trump also renewed his attacks on China: “No one has manipulated better or taken advantage of the United States more,” the president said, though he blames the situation on past U.S. leaders. “Nobody’s cheated better than China.”
- Speaking on international trade, Trump said it’s “very unfair the way we’re treated by certain countries,” singling out the EU as “very, very difficult… the barriers they have up are terrible, in many ways worse than China.”
- Trump also spoke about how the stock market has soared under his leadership, with the S&P 500 up over 45% since his election in 2016.
- He again blamed Powell and the central bank, for increasing rates too fast then cutting them too slowly: “If we had a Federal Reserve that worked with us, you could have added another 25%” to the stock market, he said.
- Trump also made remarks on climate change, saying the “horrible Paris Climate Accord that killed American jobs and shielded foreign polluters was a disaster.”
Key background: Trump’s address comes at a time when the stock market has been hitting new record highs in recent weeks, thanks to easing tensions over the ongoing U.S.-China trade war and expectations of a signed ‘phase one’ agreement. But Trump’s latest remarks break a period of relative calm between the two countries, CNBC points out.
Crucial quote: “What was missing were details about progress on phase one of the trade deal with China or the status of auto tariffs which may be placed on imports from the European Union,” says Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.
What to watch for: The stock market stayed relatively flat, as Trump’s speech didn’t provide any new insights on an upcoming trade deal. During the Q&A portion, however, Trump did say that “If we don’t make a deal, we’re going to substantially raise those tariffs.”