China Responds To Trump's "Barbaric" Tariffs: Vows To Fight "Until The End" And Have "The Last Laugh"

At the same time, picking up on what we said in "Mr. President, This Is How To Get The Fed To Launch Quantitative Easing", Eurasia Group's Ian Bremmer said that “Trump really doesn’t want the economy to tank... but if he’s headed for confrontation with China anyway (and he is), he’d rather take the hit way before elections. Implies escalation from US soon."

More importantly, it also means that the Fed will be under increased pressure to not only cut rates, but launch "some quantitative easing" as Trump demanded on August 19. As a reminder, at the end of the day, Trump sees the Fed's actions - or lack thereof - as far more important to the US economy than the outcome of the trade war, which explains his question"who is our bigger enemy, Jay Powell or Chairman Xi?"

To answer, and provoke Powell into conceding, Trump is now willing to take the US, and global, economy to the edge of recession. It's a big gamble, although Trump's position got an unexpected supporter late on Friday, when none other than BOE head Mark Carney effectively endorsed Trump's destabilizing policies by saying that the time of the US Dollar as the world's reserve currency is now over.

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