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Here We Go Again — Donald Trump vs. Jerome Powell

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Insights and Market Perspectives

Here We Go Again — Donald Trump vs. Jerome Powell

Author: Greg Valliere

December 6, 2019

— Late Edition
SOME QUICK OBSERVATIONS after this morning’s blowout jobs report . . .

A RECESSION OBVIOUSLY IS NOWHERE IN SIGHT and GDP growth of around 2% — maybe even a little higher — seems likely heading into early 2020. Consumers have money in their pockets and the labor market is red-hot.

MORE FED RATE CUTS are out of the question; in fact, there’s an outside chance that the Fed might think about a rate hike by late spring.

THIS SETS UP A RESUMPTION of Donald Trump’s bitter tweets, demanding that the Fed cut rates further; he wants the funds rate close to zero percent, but the Fed is clearly fished with easing.

TRUMP HAS TWO OPTIONS: He could ratchet up the pressure on Chairman Jerome Powell, hinting that he has the authority to fire or demote him. At the least, Powell will be a convenient scapegoat.

OR TRUMP MAY CONTINUE TO STIR THE POT ON TRADE: If there’s no deal with China anytime soon, the Fed couldn’t consider a rate hike — thus an accommodative monetary policy is likely until there’s a trade agreement. So Trump, ironically, may have an incentive to drag his feet on a deal with Beijing.

THIS MORNING’S JOBS REPORT has a big political impact. It improves Trump’s chances of winning re-election — just as the Democrats appear to be on the verge of losing their high-stakes impeachment gambit.

EVERYWHERE WE GO, we hear the same mantra: Trump is a VERY difficult guy to like, but the economy is surprisingly strong. Once he’s acquitted in the Senate later this winter, Trump simply needs to repeat over and over again that the economy is surprising to the upside. Does Trump have the discipline to stay on message? If he does, a second term is within sight.


The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

©2021 AGF Management Limited. All rights reserved.

Written by

Greg Valliere

Greg Valliere

Chief U.S. Policy Strategist

AGF Investments

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