Investors were briefly cheered Friday as Federal Reserve Chair Jerome Powell gave some moderate reassurances that the central bank is prepared to use its resources to fight a potential economic downturn. But President Donald Trump quickly dashed any air of positivity, lashing out at Powell, China, and American companies in a frantic series of tweets, leading to a dramatic plunge in stock prices.
Speaking in Jackson Hole Friday morning, Powell did not definitively announce any further plans for rate cuts or other accommodative measures, like quantitative easing. But he suggested he was taking worries about the economy seriously, saying that the Fed “will act as appropriate to sustain the expansion.”
“Our challenge now is to do what monetary policy can do to sustain the expansion so that the benefits of the strong jobs market extend to more of those still left behind, and so that inflation is centered firmly around 2 percent,” he said. He added, however, that monetary policy doesn’t have a “settled rulebook for international trade,” an oblique reference to the chaos Trump has caused with his Chinese trade war.
He added: “We can, however, try to look through what may be passing events, focus on how trade developments are affecting the outlook, and adjust policy to promote our objectives.”
Trump’s remarks weren’t nearly as measured or cautious.
“As usual, the Fed did NOTHING! It is incredible that they can ‘speak’ without knowing or asking what I am doing, which will be announced shortly,” Trump said on Twitter, apparently outraged that Powell didn’t announce sharp rates cuts, as the president has called for. “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?”
Of course, Trump himself appointed Powell and has repeatedly suggested that he has a strong personal relationship with Chinese President Xi Jinping.
CNBC documented the tumultuous results of these events in a dramatic Twitter thread:
Stocks jump to session highs & Dow turns positive after Powell's Jackson Hole speech https://t.co/ewwtEr0ClV https://t.co/vhny7OBLzH— CNBC Now (@CNBC Now) 1566569247.0
Dow, Nasdaq, S&P 500 now all in positive territory after Powell speech https://t.co/E5IJkb2nuJ https://t.co/ZxGcdPRj5Y— CNBC Now (@CNBC Now) 1566571382.0
BREAKING: After Fed chair's Jackson Hole speech, Trump tweets: "Who is our bigger enemy, Jay [Powell] or Chairman X… https://t.co/y7ftiW5FSy— CNBC Now (@CNBC Now) 1566571513.0
BREAKING: S&P 500 slides more than 1% after Trump orders U.S. companies to "start looking for an alternative to Chi… https://t.co/oFQpew2gIT— CNBC Now (@CNBC Now) 1566572826.0
UPS, Amazon, FedEx shares drop after Trump tweets: "I am ordering all carriers, including Fed Ex, Amazon, UPS and t… https://t.co/Ogu1I6S44q— CNBC Now (@CNBC Now) 1566573507.0
Stocks hit new session lows, with Dow sliding 430 points and Nasdaq falling more than 2% https://t.co/E5IJkb2nuJ https://t.co/YJWAMhIZMu— CNBC Now (@CNBC Now) 1566575002.0