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Tuesday, December 1, 2020

Trump says that in Europe there is an avalanche of tourists because of the Federal Reserve

The president of the United States accuses the EU of devaluing its currency to create a disadvantage to the US that aggravate the policies of the Fed

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Jiya Saini
Jiya Saini is a Journalist and Writer at Revyuh.com. She has been working with us since January 2018. After studying at Jamia Millia University, she is fascinated by smart lifestyle and smart living. She covers technology, games, sports and smart living, as well as good experience in press relations. She is also a freelance trainer for macOS and iOS, and In the past, she has worked with various online news magazines in India and Singapore. Email: jiya (at) revyuh (dot) com

Donald Trump returns to the charge a week after the Federal Reserve holds its next meeting. The president of the United States does it to blame his central bank for the strength of the dollar, for raising interest rates “too fast”. But if in the past he came to compare it with a bad golfer, this time he supports his criticism of Jerome Powell’s monetary strategy with an article about the avalanche of tourists in Europe.

“They have no idea,” says the Republican in a tweet. The commentary on Tuesday was one hour before the opening of Wall Street. In the message posted on the social network, Trump also accuses Europe of devaluing the euro against the dollar, “putting the US at a great disadvantage.” Already this Monday, during an interview with the financial chain CNBC, he complained that the members of the Fed do not listen to him.

The tweet in which it again attacked the Fed links to an opinion piece published by the Bloomberg agency that exposes the difficulties of the European authorities to manage the mass of tourists who visit such popular monuments as the Notre Dame Cathedral in Paris or the walk of Las Ramblas in Barcelona. The dollar did not change despite the comments of Trump favorable to the depreciation.

The US Treasury published its report on the foreign exchange market last month. The document did not cite any country as a manipulator of its currency, against the claims that Trump usually makes about Europe and China. Only limited to identify some who are under surveillance, including Italy and Ireland, despite not having its own currency to be part of the European monetary union.

This first message was completed with a second simpler and brief tweet in which he says that “the United States has very low inflation” and that that is “wonderful”. The rise in prices moderated during the last months, standing at an annual rate of 1.6%. It is clearly below the reference level that guides monetary policy. That gives the Fed leeway to be patient when it comes to adjusting its strategy and seeing how the data evolves.

Uncertainty

Traditionally, the president of the United States is favorable to a strong and stable currency. But Trump is breaking all the rules. The argument of the White House is that if the monetary policy is not correct, it has implications throughout the world. Trump, moreover, is obsessed with the trade deficit. Tourists help reduce it with their expense. But the rise in the trade deficit is also a reflection of the strength of the economy.

The president has been pushing Powell since last summer to reconsider his monetary strategy, cut interest rates and reactivate the debt-buying mechanism. Last December, before deciding the last increase, he went on to say that the Fed was “the only problem” that the economy had. On Monday, he reiterated that all this happens while China continues to devalue its currency.

“Do not forget,” says Trump, “the head of the Fed in China is President Xi Jinping. He can do whatever he wants”. The new comments from the Republican coincide with a moment of economic moderation and uncertainty over the tariff war, which could lead the Fed to lower rates in a preventive manner. Wall Street anticipates that this could happen already in July.

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