It appears that stock market investors might not be the only ones feeling the heat from the US-China trade war. In a bombshell leak from Donald Trump’s private aides, CNN confirms the rumor that President Trump lied about the phone call with China to pump flailing US stocks.
CNN reports (emphasis added):
“Though Trump and Treasury Secretary Steven Mnuchin insisted there had been “communication,” aides privately conceded the phone calls Trump described didn’t happen they way he said they did. Instead, two officials said Trump was eager to project optimism that might boost markets, and conflated comments from China’s vice premier with direct communication from the Chinese.”
For many traders, this revelation won’t come as much of a surprise.
Prominent fund manager and TV host Jim Cramer made it clear that he believes it doesn’t matter that Trump lied because it signals something much more important: that he might be softening on China.
Trump has used the stock market as a clear barometer of his trade policy and has stepped in on multiple occasions when sell-offs have been getting out of hand.
Previously labeled as a “market-friendly” president, Trump appears increasingly anxious about stagnant US indices. Despite broaching new highs this year, the Dow Jones and S&P 500 have both moved sideways since he first introduced tariffs on China.
For those without an interest in the US stock market (which is still most Americans), the concern is still not whether Trump lied or not.
Instead, it’s that the volatility in markets could herald a recession and the subsequent danger this poses to jobs and wages.
It is tough to lose a presidential election when the economy is strong. Donald Trump knows this, and his decision to allegedly tell a white lie about the trade war looks to be the first indication that he is fearful about his greatest allies – a strong stock market and fat retirement accounts – letting him down in 2020.
Last modified: June 23, 2020 2:34 PM UTC