Donald Trump Is Mad at the European Central Bank

Mario Draghi, president of the European central bank, says stimulus is on the way if Europe needs it:

Speaking at the ECB Forum in Sintra, Portugal, Draghi gave a defiantly dovish tone, saying that if the economic situation deteriorates in the coming months the bank would announce further stimulus. The euro dropped 0.2% against the dollar in a matter of minutes as Draghi delivered the remarks. The German 10-year bund yield hit -0.30% for the first time ever and the U.S. 10-year Treasury yield hit its lowest since September 2017 at 2.0475%.

This prompted a series of rage tweets from President Trump, who thinks it’s unfair that the European central bank might stimulate the European economy while the Federal Reserve sits around and does nothing to help Trump’s reelection chances. However, there’s a pretty obvious reason that Draghi is talking about stimulus while Jerome Powell isn’t, and it’s one that Trump brags about constantly: the US economy is in pretty good shape. Conversely, the EU economy has been declining for over a year:

There’s another reason Draghi is making stimulus noises: EU interest rates have been at zero for the past four years, so there’s no way for the central bank to stimulate the economy via interest rate cuts. For that reason, Draghi is trying to convince everyone that the ECB still has stimulus tools in its kit if the economy needs them. The Fed has no reason to do this, since it still has plenty of scope to lower interest rates if it needs to:

In other words, it makes perfect sense that Draghi is trying to reassure markets while Powell is being relatively more subdued. Trump doesn’t like it because he wants the US economy to be skyrocketing next year while he’s running for reelection. The fact that this might very well produce a huge recession when the Fed-engineered bubble breaks means nothing at all to him.

HERE ARE THE FACTS:

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ONE MORE QUICK THING:

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As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

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