Mr Trump, never one to waste a day without some extraordinary tweets, said: “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi.” To the uninitiated, Mr Powell is Chairman of the US Federal Reserve, whilst Chairman Xi is, of course, China’s supremo. President Trump believes the Fed should have reduced interest rates by at least a full percentage point at the end of July when it opted for “only” 25 basis points. We emphatically disagree – particularly since the Fed has stopped the gradual shrinkage of its enormously bloated balance sheet. Quantitative easing is once again a reality, with quantitative tightening well and truly buried.
Central banks in other countries that have also recently reduced their key interest rate include: New Zealand, Australia, Russia, Chile, South Korea, Brazil, South Africa, Mexico, Saudi Arabia, India and Turkey. It is expected that the European Central Bank will cut its deposit rate this month – probably to a negative 0.5%. Robust world in which we are living, isn’t it!