It is the 22nd of May 2019

President Trump Throws Powell Under The Bus: "I Think The Fed Has Gone Crazy"

Update: After a 1000 point plunge in The Dow, President Trump has found a scapegoat.

After The White House put out the calming statement (below), President Trump told reporters that "it's the correction that we've been waiting for a long time."

He was not shy about scapegoating Fed Chair Jay Powell:

“I think the Fed is making a mistake. They’re so tight... I think the Fed has gone crazy." He said he "really disagrees" with the Fed raising interest rates.

Again we're reminded of an old friend's tweet this evening...

As we noted earlier, what better justification could Trump have to "push" Powell than to accuse him of the second worst selloff of 2018?  

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What a difference a week makes.

It was just on October 3 that Trump, gloating in the warm glow of a new all time high in the S&P tweeted that "The Stock Market just reached an All-Time High during my Administration for the 102nd Time, a presidential record, by far, for less than two years. So much potential as Trade and Military Deals are completed."

Fast forward just 1 week when things are decidedly less glowing, and on a day in which the VIX exploded, the Nasdaq tumbled 4%, the S&P slumped below all key support levels, and the Dow plunged more than 800 points, its worst day since February in a Black Wednesday for tech stocks, there is far less cause for celebration.

In fact, according to CNBC's Eamon Javers, Trump was briefed on the market sell off this afternoon. And while Trump will most likely not tweet any celebratory message today, a senior White House official give Javers the following comment: "This is a bull market correction. It’s probably healthy. This will pass and the US economy remains strong."

So who was behind the selloff: deleveraging risk parity funds? Selling CTAs? A wholesale derisking into a higher interest rate environment. Or... could it be China, with its $1.5 trillion in reserves sending Trump a clear message what could happen if Trump continues to unleash hell in Beijing's general direction?

While it is unlikely that the culprit will be revealed, there is nothing that would prevent Trump from pushing the former narrative and blaming Beijing for today's rout.

That said, there is one more person who should be rather nervous after the plunge: recall that exactly 24 hours ago Trump said that he doesn't "like what the Fed is doing." What better justification could Trump have to "push" Powell than to accuse him of the second worst selloff of 2018?

Indeed, as one notable fintwit member said, a little more downside in the S&P, "and Powell can start putting his coffee cups and pencils in a cardboard box."

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