Stock Market Crash 2018. Why Is The Stock Market Crashing?
S and P 500, Nasdaq, IWM Break down below the 200 day Moving Average
1. Interest Rates
2. Donald Trump vs The Federal Reserve
3. The ongoing trade war
4. Market Valuation
Why is the FOMC Hiking Interest Rates?
As macroeconomic conditions have strengthened the FOMC believes the right path towards controlling inflation (too much money floating around) is hiking interest rates
What are the Federal Reserve's objectives in conducting monetary policy?
The Congress established the statutory objectives for monetary policy--maximum employment, stable prices, and moderate long-term interest rates--in the Federal Reserve Act.
The Federal Open Market Committee (FOMC) is firmly committed to fulfilling this statutory mandate. In pursuing these objectives, the FOMC seeks to explain its monetary policy decisions to the public as clearly as possible. Clarity in policy communications facilitates well-informed decision making by households and businesses, reduces economic and financial uncertainty, increases the effectiveness of monetary policy, and enhances transparency and accountability, which are essential in a democratic society.
Are interest rates headed higher? Yes. Look at what the fed funds rate has done for the last couple of years as well as the fed dot plot.
Donald Trump vs The Federal Reserve
Tax Cuts
The corporate tax rate was lowered from 35% to 21%, while some related business deductions and credits were reduced or eliminated. The Act also changed the U.S. from a global to a territorial tax system with respect to corporate income tax. Instead of a corporation paying the U.S. tax rate (35%) for income earned in any country (less a credit for taxes paid to that country), each subsidiary pays the tax rate of the country in which it is legally established. In other words, under a territorial tax system, the corporation saves the difference between the generally higher U.S. tax rate and the lower rate of the country in which the subsidiary is legally established.
Donald Trump VS Fed
Trump Complains About Rising Interest Rates, Calling the Fed ‘My Biggest Threat’
President Trump reiterated his complaints that the Federal Reserve is raising short-term interest rates too fast, calling the U.S. central bank “my biggest threat.”
“It’s independent so I don’t speak to him, but I’m not happy with what he’s doing, because it’s going too fast,” Mr. Trump said in an interview with the Fox Business Network, referring to Fed Chairman Jerome Powell, whom he nominated last year.
WASHINGTON—President Trump escalated his attacks on Federal Reserve Chairman Jerome Powell, saying the head of the nation’s central bank threaten U.S. economic growth and appeared to enjoy raising interest rates.
In an interview Tuesday with The Wall Street Journal, Mr. Trump acknowledged the independence the Fed has long enjoyed in setting economic policy, while also making clear he was intentionally sending a direct message to Mr. Powell that he wanted lower interest rates.
“Every time we do something great, he raises the interest rates,” Mr. Trump said, adding that Mr. Powell “almost looks like he’s happy raising interest rates.” The president declined to elaborate, and a spokeswoman for the Fed declined to comment.
Mr. Trump said it was “too early to say, but maybe” he regrets nominating Mr. Powell.
Fed officials have raised their benchmark rate three times this year, most recently in September to a range between 2% and 2.25%, and most officials expect to raise it again at their December meeting. Mr. Powell has said the Fed wants to raise rates at least to a so-called neutral level that seeks to neither spur nor slow economic growth.
In an extraordinary series of attacks last
week, Trump called the fed “crazy,” “loco” and said it’s “gone wild” with interest rate hikes. And he blamed the central bank, in part, for the latest sharp decline in the stock Market.
“I think the Fed is out of control,” he told reporters thursday.
“I think I know it better than they do,” Trump said. He expressed disappointment with Powell but said he would not fire him, something he lacks the authority to do anyway barring extreme circumstances.
Trade War Update:
Larry Kudlow, top White House economic advisor, told reporters that President Donald Trump will meet with China's president, Xi Jinping, next month at the G-20 summit in Buenos Aires, Argentina, raising investor hopes that both leaders will seek to deescalate trade tensions.
China Stock Market Crash:
S and P 500, Nasdaq, IWM Break down below the 200 day Moving Average
1. Interest Rates
2. Donald Trump vs The Federal Reserve
3. The ongoing trade war
4. Market Valuation
Why is the FOMC Hiking Interest Rates?
As macroeconomic conditions have strengthened the FOMC believes the right path towards controlling inflation (too much money floating around) is hiking interest rates
What are the Federal Reserve's objectives in conducting monetary policy?
The Congress established the statutory objectives for monetary policy--maximum employment, stable prices, and moderate long-term interest rates--in the Federal Reserve Act.
The Federal Open Market Committee (FOMC) is firmly committed to fulfilling this statutory mandate. In pursuing these objectives, the FOMC seeks to explain its monetary policy decisions to the public as clearly as possible. Clarity in policy communications facilitates well-informed decision making by households and businesses, reduces economic and financial uncertainty, increases the effectiveness of monetary policy, and enhances transparency and accountability, which are essential in a democratic society.
Are interest rates headed higher? Yes. Look at what the fed funds rate has done for the last couple of years as well as the fed dot plot.
Donald Trump vs The Federal Reserve
Tax Cuts
The corporate tax rate was lowered from 35% to 21%, while some related business deductions and credits were reduced or eliminated. The Act also changed the U.S. from a global to a territorial tax system with respect to corporate income tax. Instead of a corporation paying the U.S. tax rate (35%) for income earned in any country (less a credit for taxes paid to that country), each subsidiary pays the tax rate of the country in which it is legally established. In other words, under a territorial tax system, the corporation saves the difference between the generally higher U.S. tax rate and the lower rate of the country in which the subsidiary is legally established.
Donald Trump VS Fed
Trump Complains About Rising Interest Rates, Calling the Fed ‘My Biggest Threat’
President Trump reiterated his complaints that the Federal Reserve is raising short-term interest rates too fast, calling the U.S. central bank “my biggest threat.”
“It’s independent so I don’t speak to him, but I’m not happy with what he’s doing, because it’s going too fast,” Mr. Trump said in an interview with the Fox Business Network, referring to Fed Chairman Jerome Powell, whom he nominated last year.
WASHINGTON—President Trump escalated his attacks on Federal Reserve Chairman Jerome Powell, saying the head of the nation’s central bank threaten U.S. economic growth and appeared to enjoy raising interest rates.
In an interview Tuesday with The Wall Street Journal, Mr. Trump acknowledged the independence the Fed has long enjoyed in setting economic policy, while also making clear he was intentionally sending a direct message to Mr. Powell that he wanted lower interest rates.
“Every time we do something great, he raises the interest rates,” Mr. Trump said, adding that Mr. Powell “almost looks like he’s happy raising interest rates.” The president declined to elaborate, and a spokeswoman for the Fed declined to comment.
Mr. Trump said it was “too early to say, but maybe” he regrets nominating Mr. Powell.
Fed officials have raised their benchmark rate three times this year, most recently in September to a range between 2% and 2.25%, and most officials expect to raise it again at their December meeting. Mr. Powell has said the Fed wants to raise rates at least to a so-called neutral level that seeks to neither spur nor slow economic growth.
In an extraordinary series of attacks last
week, Trump called the fed “crazy,” “loco” and said it’s “gone wild” with interest rate hikes. And he blamed the central bank, in part, for the latest sharp decline in the stock Market.
“I think the Fed is out of control,” he told reporters thursday.
“I think I know it better than they do,” Trump said. He expressed disappointment with Powell but said he would not fire him, something he lacks the authority to do anyway barring extreme circumstances.
Trade War Update:
Larry Kudlow, top White House economic advisor, told reporters that President Donald Trump will meet with China's president, Xi Jinping, next month at the G-20 summit in Buenos Aires, Argentina, raising investor hopes that both leaders will seek to deescalate trade tensions.
China Stock Market Crash:
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