Trump rips Fed's Powell, demands companies abandon China

President Donald Trump on Friday excoriated the Federal Reserve and the man he hand-picked to lead the institution, ramping up his relentless critiques by asking whether the Fed was a “bigger enemy” than China.

After Fed chief Jerome Powell declared at a conference in Jackson Hole that the central bank was prepared to sustain the U.S. economy with more rate cuts, Trump upped the ante with more broadsides against Fed policy,

In a series of posts on Twitter, the president both lambasted Fed policy and demanded that U.S. companies seek alternatives to China as the trade dispute between the two countries takes a turn for the worse. On Friday, Beijing announced a new round of retaliatory tariffs worth $75 billion, which will be imposed in two separate tranches on September 1 and December 15.

Trump’s tone was even more harsh than usual, asking whether Powell was worse for the economy than Chinese President Xi Jinping, with whom he’s been sparring over bilateral trade.

Trump’s tweets sent major market benchmarks reeling, as investors anticipated a worsening of the crisis between the world’s two largest economies. The S&P 500 (^GSPC) Dow (^DJI) and Nasdaq (^IXIC) all tumbled by over 1% in the wake of the president’s tirade.

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Trump nominates Jerome Powell to lead U.S. Federal Reserve
US President Donald Trump shakes hands as he announces his nominee for Chairman of the Federal Reserve, Jerome Powell, in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump announces his nominee for Chairman of the Federal Reserve, Jerome Powell (L), in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump announces his nominee for Chairman of the Federal Reserve, Jerome Powell (L), in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
Jerome Powell listens as US President Donald Trump announces Powell as nominee for Chairman of the Federal Reserve in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
Jerome Powell listens as US President Donald Trump announces Powell as nominee for Chairman of the Federal Reserve in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
U.S. President Donald Trump announces Jerome Powell as his nominee to become chairman of the U.S. Federal Reserve in the Rose Garden of the White House in Washington, U.S., November 2, 2017. REUTERS/Carlos Barria
US President Donald Trump announces his nominee for Chairman of the Federal Reserve, Jerome Powell, in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
U.S. President Donald Trump, left, and Jerome Powell, governor of the U.S. Federal Reserve and Trump's nominee for chairman of the Federal Reserve, walk to a nomination announcement in the Rose Garden of the White House in Washington, D.C., U.S., on Thursday, Nov. 2, 2017. If approved by the Senate, the 64-year-old former Carlyle Group LP managing director and ex-Treasury undersecretary would succeed Janet Yellen. Photographer: Andrew Harrer/Bloomberg via Getty Images
Jerome Powell (R) speaks after being nominated for Chairman of the Federal Reserve by US President Donald Trump (L) in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump announces his nominee for Chairman of the Federal Reserve, Jerome Powell, in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump (L) signals the end of ceremony after announcing Jerome Powell (R) as nominee for Chairman of the Federal Reserve in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
Jerome Powell (R) speaks after being nominated for Chairman of the Federal Reserve by US President Donald Trump (L) in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump walks with Jerome Powell, his nominee to be Federal Reserve chairman, at the White House in Washington, DC, on November 2, 2017. / AFP PHOTO / NICHOLAS KAMM (Photo credit should read NICHOLAS KAMM/AFP/Getty Images)
US President Donald Trump walks with Jerome Powell, his nominee to be Federal Reserve chairman, at the White House in Washington, DC, on November 2, 2017. / AFP PHOTO / NICHOLAS KAMM (Photo credit should read NICHOLAS KAMM/AFP/Getty Images)
US President Donald Trump walks with Jerome Powell, his nominee to be Federal Reserve chairman, at the White House in Washington, DC, on November 2, 2017. / AFP PHOTO / NICHOLAS KAMM (Photo credit should read NICHOLAS KAMM/AFP/Getty Images)
Jerome Powell (R) leaves with US President Donald Trump leave after he was nominated for Chairman of the Federal Reserve in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
US President Donald Trump shakes hands with his nominee for Chairman of the Federal Reserve, Jerome Powell (R), in the Rose Garden of the White House in Washington, DC, November 2, 2017. / AFP PHOTO / SAUL LOEB (Photo credit should read SAUL LOEB/AFP/Getty Images)
U.S. President Donald Trump arrives shakes hands with Jerome Powell, his nominee to become chairman of the U.S. Federal Reserve at the White House in Washington, U.S., November 2, 2017. REUTERS/Carlos Barria
U.S. President Donald Trump announces Jerome Powell as his nominee to become chairman of the U.S. Federal Reserve in the Rose Garden of the White House in Washington, U.S., November 2, 2017. REUTERS/Carlos Barria
U.S. President Donald Trump arrives in the Rose Garden to announce Jerome Powell as his nominee to become chairman of the U.S. Federal Reserve at the White House in Washington, U.S., November 2, 2017. REUTERS/Carlos Barria
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China is an integral part of the global supply chain and a vast market for most of America’s multinationals. Many economists say that shifting production and finding alternative markets is far easier said than done.

Even before the central bank cut rates for the first time since the 2008 crisis, the president has been lashing the Fed for not doing enough to prevent the economy from tipping into recession.

In recent weeks, he’s taken to complaining about the dollar’s relative strength — which has jumped amid safe-haven flows during the U.S.-China trade spat.

Meanwhile, comments from the Fed’s Open Market Committee (FOMC) members and other policymakers underscore the lack of consensus about how aggressively the central bank should be in cutting rates, if at all.

"As the minutes from the July FOMC meeting indicated, the nation’s central bankers were divided on the question how exactly to proceed while settling on the quarter-point rate reduction,” said Bankrate.com’s senior economic analyst, Mark Hamrick.

“Powell emphasized in his speech that there’s no playbook here noting as he put it 'no recent precedents to guide any policy response to the current situation.' And that’s to say nothing of the president’s actions which have included imposing tariffs and delivering an almost daily barrage of verbal criticism of Powell,” Hamrick added.

Javier David is an editor for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek

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