The Fed’s Next Move Against Trump
Over the last few weeks, I’ve been building a case that the Fed and President Trump are at war with one another.
First, let’s briefly review this.
It is now clear that the Fed attempted to aid the Deep State coup against the President by intentionally damaging the U.S. economy and the U.S. stock market from 2017-2019.
The Fed did this by embarking on the most aggressive monetary policies in its history, raising interest rates three times in 2017 and four times in 2018 while also shrinking its balance sheet by $600 billion.
And keep in mind that every $200 billion in balance sheet reduction is the equivalent of another rate hike. So all told, we’re talking about 10 rate hikes total in the span of two years (seven actual rate hikes and three hikes via balance sheet reduction).
The President caught on to this scheme in late 2018 when the Fed’s policies resulted in a brief but violent stock market crash. Since that time, the President has been openly criticizing the Fed and its policies both in the media and on Twitter.
At the same time, the President and his proxies have begun building a case for taking over the Fed in the near future.
Thus far, this has consisted of publicly pointing out that other countries’ central banks – particularly the Bank of China and the European Central Bank – are aggressively easing monetary policies, thereby manipulating their currencies to take advantage of the U.S.
The President has specifically pointed out that China’s President controls China’s central bank, decrying that he himself doesn’t have such a privilege.
When you couple this with his advisor Art Laffer’s recent public statements that the Fed shouldn’t be independent but should be controlled by the President and Congress, it becomes clear what the Trump administration is planning.
So… why haven’t they formalized this yet?
Because the President is watching to see what the Fed does at its July meeting…
The Trump Vs. Fed Battle is Coming to a Head
Right now, the markets are 100% certain the Fed will cut rates in some form at its meeting on July 31.
This is rather striking because multiple Fed officials have scoffed at the idea of cutting rates right now. Even Fed Chair Jerome Powell, the man who the president has talked about demoting, has even stated he’d like to see more data before cutting rates.
This opens the door to the Fed disappointing the markets in a major way. But I have a feeling the Fed has something more sinister up its sleeve…
After all, if the Fed really wanted to hurt the President, it would cut rates by 0.25% in July as a kind of gesture of “good will” and then keep rates at that level for the rest of the year.
Doing this would be far more damaging to the stock market and the economy, as both would begin to anticipate a full easing cycle of four or more rate cuts as soon as the Fed cuts rates the first time.
Moreover, if the Fed were to cut rates once in July and then keep them there for the remainder of 2019, it would push back the war between the President and the Fed into 2020.
That wouldn’t be good for President Trump…
Reason being, if the Fed were to cut rates just once in July and then hold them there into 2020, the President likely wouldn’t figure out what they were up to until late 2019 (November or December). By then, it might be too late to take over the Fed without drawing criticism of “election interference.”
Bottom Line: Whatever the Fed does at its July meeting, the stage is set for a major showdown between the Central Bank and the President. It’s no longer a question of “if” but a question of “when.”
Those investors who are correctly positioned for this have the opportunity to generate literal fortunes.
Imagine being able to time the currency markets to profit from what is about to happen to central banks days in advance?
I’ve spent the last six months developing a trading strategy to do precisely this.
In the last month alone, we’ve seen gains of 67% in two days’ time, 75% in five days’ time, even 100% in four days’ time.
I’ll tell you all about it in the coming weeks, but suffice to say, the opportunity to generate literal fortunes from central bank schemes is here.