Powell Speaks, Trump Tweets, China Reacts, Markets Freak. Repeat
Investors are reacting not only to earnings and economic growth, but also to unpredictable moves by influential policymakers.
The ups and downs of asset prices on any given day are being determined, more and more, by the words and actions of three men.
First, of course, is Donald Trump, who has rediscovered his power to send markets soaring—or into a tailspin—with less than 280 characters on Twitter. Then there’s U.S. Federal Reserve Chairman Jerome Powell, who repeatedly finds himself on the receiving end of nasty Trump tweets for abiding by his mandate to do what’s best for the U.S. economy, which isn’t necessarily always the same thing as what’s best for the sitting president. And in Beijing, it’s Xi Jinping, the president of China who sits atop a Communist Party in which politicians and central bankers famously sing from the same hymnal, at least when the audience is outside observers.