- The Fed’s going to anger Trump tomorrow…
- Why Europe accepted a lousy trade deal with the U.S….
- TRUMP’S CURSE: A $35 Trillion Meltdown Ahead? Robert Kiyosaki just issued his boldest warning yet — and he says the clock’s almost out of time.
Dear Reader,
President Trump, yesterday:
“He’s leaving very soon, I’ll miss him.”
The president refers of course to the Hon. Jerome H. Powell, Federal Reserve chairman.
Is the president hearing whispers you and I are not? I do not know.
Yet I am confident — extremely — that the president will freshly denounce Mr. “Too Late” Powell early tomorrow afternoon.
That is when the Federal Reserve will announce its decision on the federal funds rate.
And it is highly unlikely the Federal Reserve will announce a rate reduction… despite the president’s multiple pleas for rate reductions.
CME Group’s “FedWatch” gives 97% odds that Mr. Powell and mates will hold rates steady tomorrow.
The Federal Reserve does not like to give the stock market unexpected jolts. And so the Federal Reserve will maintain the federal funds rate between 4.25-4.50% tomorrow.
I will devour these very words if mistaken — without salt.
Trump Notches a Trade War Victory
Meantime, the president recorded another trade war victory this weekend. In this instance, trade war victory over the European Union.
President Trump has labelled it “the biggest deal ever reached.” Under which:
The European Union will impose no tariffs on many United States exports.
The United States will impose 15% tariffs on most European Union exports.
The United States will maintain its present 50% tariff on European Union steel and aluminum exports.
The European Union will purchase $750 billion of American energy products, largely liquefied natural gas.
The European Union commits to purchasing “hundreds of billions of dollars worth of military equipment” from the United States.
The European Union will invest some $600 billion in the United States economy (though admittedly, the European Union may never fulfill the pledge).
Many Europeans believe the American president gave Europe a good, hard roughhousing.
He won all, they believe… and conceded not one thing.
A “Dark Day” for Europe
Thus reports CNN:
- President Donald Trump may rate Sunday’s trade agreement with the European Union as the “biggest deal ever,” but for some within the 27-nation bloc, it feels a lot more like economic appeasement.
- French Prime Minister François Bayrou called Sunday a “dark day” for the region in a post on X. “An alliance of free peoples, gathered to assert their values and defend their interests, resolves to submission,” he wrote…
- Hungarian Prime Minister Viktor Orban said… that Trump had steamrolled the EU in negotiations, comparing the US president to a heavyweight boxer against [European Commission President] von der Leyen’s “featherweight”…
- Bernd Lange, chair of the European Parliament’s trade committee, said the deal is “not satisfactory”… adding that “concessions have clearly been made that are difficult to accept.”
Why did Europe agree to the clipping?
I hazard the answer reduces to European fear.
Fear, that is, that the United States is turning from Europe… and redirecting its gaze towards the Indo-Pacific region.
A trade accord with the United States — even a submissive trade accord with the United States — tethers the United States to Europe.
It yokes American fates to European fates.
Thus Europe is willing to sink to its knees… and kiss Mr. Trump’s gaudy ring.
Europe Needs the United States
As I have argued before:
The entire European project shelters beneath the mighty wings of the American eagle.
The central imperative of the 1949 North Atlantic Treaty Organization was — famously — to keep the Americans in… the Russians out… and the Germans down.
Let the United States tend to our defense, Europe said.
It can then repurpose its swords into plowshares.
It can erect lavish welfare states to maintain its citizens in a sort of opulence.
Beneath the comfortable American security blanket, Europeans have acquired an extravagant taste for butter — for costly butter.
If the United States withdraws its guns, Europe will be forced to manufacture its own.
And Europe cannot afford these guns if it maintains our extravagant butter purchases.
Most importantly, the mighty United States has quieted ancient European quarrels.
Should the United States release Europe from its protective fold? Europe may rediscover these quarrels.
It may discover that Europeans are not primarily Europeans — but primarily Frenchmen, Germans, Italians, Belgians, Spaniards and Dutchmen.
Its airy-fairy dreams of a unified and borderless Europe may therefore die the death.
And Europe may learn that history has not in fact ended.
It may discover instead that history has it by the tail.
Hence the European horror at a potential American exodus.
It’s Not About Russia
Many European leaders like to yell about the threat from Mr. Putin’s Russia.
They shriek that the Ukrainian hors d’oeuvre will not satiate Mr. Putin’s vast territorial hungers.
They argue he will next gobble Poland and the Baltic states. All of Europe will appear ultimately upon the dinner plate.
Yet I do not believe the yells are sincere. Consider:
Over three years in, Russia has chewed off perhaps 20% of Ukrainian land.
Russia can take in mere bitefuls — it appears incapable of mouthfuls.
Is this a nation that can take a rich European meal down its gullet?
I do not see how it is possible.
Thus the Europeans want the Americans in for separate reasons.
Europe fears it may revert to feuding constituent parts… should the Americans walk away.
As I have argued before:
Europeans do not fear Russians.
They fear themselves.
Brian Maher
for Freedom Financial News
