Fed Monetary Policy Consider Financial Stability Risk More Broadly, Not Embolden the Trade War!

The Federal Reserve effectiveness is unjustifiably tested by President Trump, who blames data-dependent monetary policy for a stronger dollar rather than a strong U.S. economy, record low unemployment and a bond bias, driven by concerns of a slowing global economy as well as the U.S. – China trade and technology war. The latter exacerbated dollar strength following the Treasury’s decision to impose 25% and 10% tariffs on 250 billion and 300 billion worth of Chinese products spanning transport equipment, apparel and U.S. technological products. The Chinese economy, whilst important to U.S. technology supply chains, is also more exposed to trade…...