Stocks fell by 1.38% in the US and 0.70% outside the US amidst more trade problems.
Fed Chairman Jerome Powell said that future interest rate cuts are possible, but he made it clear that the Fed can only do so much in face of a trade war. “While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rule book for international trade. "Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States,” Mr. Powell said, adding that there were “no recent precedents to guide any policy response to the current situation.”
Powell's comments followed China's Friday announcement that they would retaliate against the Trump administration’s next round of tariffs by increasing taxes on $75 billion of American imports. Trump, of course, followed during the weekend and said he would increase tariffs on China.
So both countries continue to follow the trade war playbook of each country ramping up retaliation in response to the other. As history has shown it is a war of no winners. And it leads us to believe more and more that Trump has no understanding of economics or how the US has thrived since WWII.
Trump let it be known that he was interested in buying Greenland from Denmark to which the Danish Prime Minister responded that the idea was "an absurd discussion." Trump got offended and canceled his trip to the country. Following Trump's comments, Greenland's Soren Esperson, the foreign-affairs spokesperson for the Danish People's Party, said: "If it is true he [Trump] works with those thoughts then it is definitive proof that he has gone crazy." The former prime minister Lars Looke Rasmussen said it "must be an April Fool's Day Joke."
Bruce Konners, CPA, CFA, PFS
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