European Central Bank President Mario Draghi turned ultra-dovish in a speech in Portugal on Tuesday.
Draghi is almost pre-committing to more monetary stimulus as risks rise. Is this a motivation for Federal Reserve Chairman Jerome Powell and his cohorts to cut interest rates as they meet this week?
President Trump on Tuesday blasted Draghi because stimulus in Europe means a lower euro versus the dollar, giving an edge to European companies in their exports to the U.S. On the other hand, the U.S. stock market is encouraged by Trump’s tweet of a “very good” phone call with President Xi of China and the news of an extended meeting with him at the G20.
Let’s explore the good and the bad of these moves for stocks with the help of a chart.