Trump Trade War Escalates as President Attacks Federal Reserve, Goldman Sachs

Strategic Insights -

US President Donald Trump has ignited a row with the Federal Reserve and Wall Street bank Goldman Sachs over trade tariffs, claiming "trillions of dollars" are being taken in on duties, despite official data showing a slowdown in inflation. In a social media outburst, Mr Trump told the boss of Goldman Sachs, David Solomon, to "focus on being a DJ" after the bank warned that the president's tariff campaign threatened the American economy.

Key Takeaways:

  • The US President claimed "trillions of dollars" are being taken in on tariffs, despite official data showing a slowdown in inflation.
  • Trump's comments came after economists at Goldman Sachs issued a note warning that American companies had so far swallowed the impact of tariffs but would slowly pass on cost increases to consumers.
  • The US President attacked the Federal Reserve, claiming its chairman, Jerome Powell, was "too late" to cut interest rates, which he said had done "incalculable" damage to the American economy.
  • Trump also threatened to sue the chairman of the US Federal Reserve over the renovation of some of the central bank's buildings.
  • The US President nominated a new statistician, EJ Antoni, who suspended the monthly publication of the jobs data, citing concerns over the accuracy of the data.
  • The new head of the BLS, EJ Antoni, expressed concerns over the accuracy of the data, stating it was a serious problem that needs to be fixed immediately.

Statistics:

  • The US consumer prices index rose at 2.7pc in June (Bureau of Labor Statistics).
  • The expected inflation rate was 2.8pc (analyst expectations).
  • The US jobs market saw a sharp slowdown, with the president claiming the top statistician, Erika McEntarfer, "rigged" jobs data (reported by the president).
  • Dr. EJ Antoni, the new head of the BLS, suspended the monthly publication of the jobs data (reported by Fox Business).
  • The renovation of the Fed buildings cost $3.1bn (compared to the initial estimate of $2.7bn, reported by the US President).

Sources:

  • Donald Trump's social media posts on Truth Social (no date mentioned).
  • Economic note by Goldman Sachs (no date mentioned).
  • Bureau of Labor Statistics (no date mentioned).
  • Statement by EJ Antoni, new head of the BLS, on Fox Business.
  • Institute of Economic Affairs (no date mentioned).