President Trump took to social media before the market open on Monday and called for the Fed to cut rates as markets tumble and some on Wall Street see the US economy tipping into recession this year.
“Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place,” Trump said on his social media platform, Truth Social.
“This is despite the fact that the biggest abuser of them all, China, whose markets are crashing, just raised its Tariffs by 34%, on top of its long term ridiculously high Tariffs (Plus!), not acknowledging my warning for abusing countries not to retaliate.”
Later in the morning President Trump threatened additional 50% tariffs on China starting on Wednesday, unless Beijing removes retaliatory levies on US-made goods announced last week in reaction to Trump’s sweeping levies revealed on April 2.
The president’s sweeping retaliatory tariff announcement last week sparked a sell-off in stocks that pushed the S&P 500’s losses across Thursday and Friday north of 10% while the Nasdaq fell into a bear market.
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Overnight, global markets tumbled, with China’s Hang Seng (^HSI) index tumbling more than 13% while Japan’s Nikkei 225 (^N225) entered a bear market on Monday after falling 7.8%.
And Wall Street isn’t confident the selling is over. Citi head of US equity strategy Stuart Kaiser wrote in a note to clients on Sunday he sees “ample space to the downside” for stocks.
Strategists across the Street also continue paring their forecasts for the S&P 500 this year, with multiple banks now expecting the index to fall this year.
The selling hasn’t been confined to stocks, either, with oil prices falling again on Monday with WTI crude oil briefly trading below $60 a barrel for the first time in four years.
Amid this selling, the president has given little indication he plans to backtrack on his tariff plans, with Trump firing off a flurry of social media posts defending his controversial tariff policies and shrugging off market volatility.
“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates,” Trump said in a post on his social media app Truth Social on Friday. “He is always ‘late,’ but he could now change his image, and quickly.”
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