Pres. Trump predicts that China will cut interest rates, he says so should the Fed

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May 14, 2019 2:20pm ETF BASIC NEWS

From Jeff Cox : President Donald Trump predicted Tuesday that China’s next move in the trade war will be a rate cut, and he pushed the Federal Reserve to follow suit in what he said would lead to a clear victory for the U.S.

In a tweet that amounted to the latest salvo in the tariff dispute between the two nations, the president ramped up his pressure on the Fed to ease monetary policy

He said that should the central bank meet a China rate cut with one of its own, that would be “game over, we win!”

The White House and Beijing have hit an impasse in their ongoing trade negotiations. Washington is looking for a lowering of barriers into China and for the nation to halt the theft of intellectual property. As recent talks stalled, China retaliated against Trump’s latest round of tariffs, announcing plans Monday to slap new levies on $60 billion worth of American goods.

Trump’s remarks on Tuesday come amid market volatility spurred by uncertainty over the direction of the talks and how long they might continue before a solution is reached.

In earlier tweets, Trump insisted that he will only accept a “great deal” for the U.S.

Along with the heat he has placed on China, Trump has leaned hard on the Fed to cut its benchmark interest rate. The central bank raised rates four times in 2018, but markets now are pricing in a rate cut as soon as October.

Minneapolis Fed President Neel Kashkari told CNBC on Monday that he thinks monetary policy for now is correct.

The iShares 1-3 Year Treasury Bond ETF (SHY) was trading at $84.10 per share on Tuesday afternoon, down $0.02 (-0.02%). Year-to-date, SHY has gained 0.74%, versus a 7.21% rise in the benchmark S&P 500 index during the same period.

SHY currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #2 of 29 ETFs in the Government Bonds ETFs category.

This article is brought to you courtesy of CNBC.

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