Trump’s address to Congress might be a landmark event for his first 100 days. His softer, more focused tone inspired markets yet again. The Dow Jones climbed to over 21,000 as the President spoke on restarting the economy and pouring new money into military developments. But the question of will his cuts and spending increases keep the dollar from weakening still remains.
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Investors will have much to mull over this week as Donald Trump gives his first address to Congress, and Federal Reserve Chair Janet Yellen speaks Friday. After that, the FOMC goes into their blackout period in anticipation of their March 14-15 policy meeting.
Tuesday night, Donald Trump will give his first State of the Union address to Congress, which is expected to touch on immigration, tax cuts, regulation, Obamacare, trade agreements, defense, and homeland security. Investors are hoping Trump will lay out more specifics on his tax plan and trade policy.
In his latest podcast, Peter Schiff looks at Donald Trump’s appearance at the CPAC last week where the new POTUS seemed to hit the campaign trail again, attacking the media, yet saying little about his tax reform or trade deficit policies. President Trump seems to have morphed into Candidate Trump, making promises while avoiding the necessary changes and economic sacrifices Americans will need to make.
This week, we saw predictions Trumponomics will indeed bring a spike of growth, but it will be a spike quickly destroyed by crippling interest rates. Could this be what’s causing the US Federal Chair Janet Yellen to suggest raising rates too fast would be “unwise”? As seats start opening up at the FOMC, Trump is in position to add key new members and start swaying the vote in his administration’s favor.
Today, we celebrate the birthday of Irwin Schiff, one of our nation’s most influential activists for free markets and limited government. Irwin was a proud, freedom-loving American who died a political prisoner in a Texas federal prison. Neither the irony of his passing nor his convictions escaped the millions of people Irwin inspired to become activists. He helped them understand the destructive consequences of an over-reaching and over-regulatory government.
Peter Schiff recently appeared on CNBC’s “Future’s Now” letting millions of American voters know that if they’re frustrated with Trump, they should blame the Federal Reserve. “If the economy was in good shape, not only would he have not been elected, he wouldn’t have been the Republican nominee.”
The price of gold is moving in contradiction to its economic purpose, which is to serve as an investor safe haven against inflation. Shortly after the election, the dollar index spiked as gold prices began a quick decline; however, recently the trend has reversed. Gold is now up around 7% since the Fed’s December rate hike, according to Bloomberg.
In Peter Schiff’s latest podcast, Peter discussed the Consumer Price Index and retail sales reports released last week. Janet Yellen provided the data in a report to Congress. The chairwoman’s testimony brought on a new wave of optimism in the markets that interest rate hikes would be coming sooner than last year’s cycle of promise-then-disappoint.
Yellen spoke to congress this week, and her remarks about the new Commander in Chief could be foreshadowing an upcoming battle between the Fed’s goals and Trump’s plan to weaken the dollar. The President also made amends with China’s President Xi Jinping, but has new problems to deal with as other foreign governments shed their US Treasury holdings.
