Well, it turns out Jackson Hole isn’t the big story of the day, although Jay Powell’s indecisive speech exacerbated the tariff threat from China.  The market was coming to grips with the idea the Fed would still cut rates and trade talks would continue.

Then came the tweets.  President Trump’s initial anger at Jay Powell sent stocks lower, but the plunge came after a series of tweets demanding American companies to stop doing business in China. 

Trump on Fed

Donald J. Trump

....My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?

Donald J. Trump

As usual, the Fed did NOTHING! It is incredible that they can “speak” without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work “brilliantly” with both, and the U.S. will do great...

Trump on China

Donald J. Trump

....all deliveries of Fentanyl from China (or anywhere else!). Fentanyl kills 100,000 Americans a year. President Xi said this would stop - it didn’t. Our Economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China. We will keep it that way!

Donald J. Trump

....your companies HOME and making your products in the USA. I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States. Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE...

Donald J. Trump

....better off without them. The vast amounts of money made and stolen by China from the United States, year after year, for decades, will and must STOP. Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..

Donald J. Trump

Our Country has lost, stupidly, Trillions of Dollars with China over many years. They have stolen our Intellectual Property at a rate of Hundreds of Billions of Dollars a year, & they want to continue. I won’t let that happen! We don’t need China and, frankly, would be far....

This morning several members of the Federal Reserve said the greatest pain from the trade war wasn’t in the United States but in struggling countries.  Interestingly, China let the word leak out this morning that they would be ready to totally decouple from the United States, but it’s unlikely they could find more than half a trillion dollars market anywhere else on the planet.

I’ll have a greater analysis of the Fed this coming Monday, especially with the market today.  I think Powell must have more urgency and he can do that without looking rattled or panicked.