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For that reason, the presidents should not deal with the Fed



Wall Street largely expects the Fed to raise interest rates on Wednesday. But Trump told Reuters last week that another rate hike would be "stupid". He said in the Fox News, "Hopefully the Fed will not raise interest rates anymore."

"It would shock markets if they did not rise and show political capitulation," said David Kotok, co-founder and chief investment officer of investment firm Cumberland Associates. "Trump's attacks on the central bank are of no use to anyone."

Greg Valliere, chief strategist at Horizon Investments, argues that inflation and the growth of the Fed's growth estimates on Wednesday would give the opportunity to skip a rate hike. except the Trump factor.

"We do not believe Chairman Jay Powell pays much attention to the President, but cynics in the bond market and elsewhere would howl to politicize a Stand-Pat Federation," Valliere told his clients a recent note.

Valliere described "two great Fed ironies". First, the central bank must raise interest rates just because of Trump's pressure. And secondly, Trump had "the most reticent Fed chairman in our lives ̵

1; but he fired her."

In fact, Trump Fox News lamented that former President Barack Obama had "zero" interest rates for years. At that time, of course, former Fed chief Janet Yellen tried to make the economy healthy again. In any case, Trump will probably be disappointed on Wednesday by the Fed.

  Almost Half of US Financial Leaders Fears 2019 Recession
Despite the recent market turmoil, investors expect a 77% chance of a quarter-point increase the CME FedWatch tool.
However, Wall Street expects the Fed to curb its 2019 interest rate hike forecast (the infamous dot plot) due to emerging signs of slower global growth and the indication that higher borrowing costs are depressing the real estate market and car sales ,

PIMCO's Joachim Fels and Andrew Balls wrote in a report last week that a "break" in the first half of 2019 "seems increasingly likely". Bank of America Merrill Lynch expects US Federal Reserve 2019 dot plots to signal two and only one increase in 2020. Even Goldman Sachs, who has long called for four rate hikes in 2019, has softened his view of Fed policy.

Nevertheless, Trump's attacks on the Fed for Powell, which was nominated by the president, make unpleasant changes.

While Trump is concerned about short-term economic and stock market volatility, especially before the 2020 election, the Fed has further concerns.

The central bank, an institution proud of being above politics, is accused of protecting itself against the risk of runaway inflation. The 1970s showed how weak inflationary peaks can be.

The US Federal Reserve must protect the reputation of the central bank as an independent state. Otherwise, investors may lose confidence in the stability of the system.

"History documents the abuse of central banks, which are influenced by political forces that lead to inflation and eventually to hyperinflation – Venezuela, Zimbabwe and the Weimar Republic," Kotok said. "The importance of central bank independence can not be overstated."

2. Bank of England: With Britain deeply involved in Brexit riots, investors are watching the Bank of England meeting on Thursday. At its last meeting in September, it left interest rates unchanged at 0.75%.

"Since the committee's last meeting, there have been signs of greater uncertainty about future developments in the process of withdrawal, especially on the financial markets," it said.

The British government has still not come closer to a Brexit deal, and the BOE warned that leaving the European Union would be difficult for the economy.

3. US GDP: The US Bureau of Economic Analysis will publish its third estimate of GDP for the third quarter on Friday.

The second estimate published at the end of November was an annualized growth rate of 3.5%, reflecting its October estimate. This is a slower rate than the rate of 4.2% in the second quarter due to a slowdown in business investment. The economy boomed in the first half of the year, in part due to the drastic tax cut in late 2017.
4. Revenue: A few confusing tech, retail and consumer companies will report earnings this week, including FedEx FDX), Olive Garden owners Darden (DRI), General Mills (GIS), Walgreens Boots Alliance (WBA), Blackberry (BB). and Oracle (ORCL).
Note Nike (NKE). Although the stock has risen 16% this year, its value has fallen sharply since the last earnings report. Some concerns concern Trump's bottom line tariffs and the reduction in his focus. The result on Thursday will also be the first full report since it released its controversial Colin Kaepernick ad.

5. This week will appear:

Monday – Oracle (ORCL) Income
Tuesday – FedEx (FDX) and Darden ( DRI) income
Wednesday – Revenues of General Mills (GIS); Fed Decision on Interest Rates
Thursday – Income from Nike (NKE), Walgreens Boots Alliance (WBA) and Blackberry (BB); Bank of England meeting
Friday – Carmax (KMX) income; Third estimate of GDP.

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