Paul Donovan, the global chief economist for Swiss firm UBS Wealth Management, said in a note Monday that while the tweet over Iran may be serious, markets are beginning to look through the president’s online activity.
“After Trump’s tweeting threats against North Korea and the fact that North Korea still seems to be carrying on with its nuclear program unimpeded, it would appear that markets are not inclined to take Trump’s tweets seriously,” he said.
The president had issued a series of aggressive tweets in the weeks leading up to June’s historic summit with North Korean leader Kim Jong Un. That shock meeting led many to praise Trump’s blunt style of diplomacy.
But the top U.S. military commander on the Korean peninsula, Army Gen. Vincent Brooks, admitted Saturday that North Korea’s nuclear capacity remains very much intact, leaving Trump’s harsh rhetoric looking somewhat hollow.
Trump has also used Twitter to criticize the Federal Reserve’s monetary policy, suggesting that rate rises are wrong. Fed officials, including Chairman Jerome Powell, have raised interest rates twice this year and have pointed to two more rises before the end of 2018.
Trump’s tweeted comments came after his initial critical remarks about the Fed were broadcast by CNBC during an exclusive interview that saw the president express frustration with Fed policy.
“I’m not thrilled,” he told CNBC’s Joe Kernen in the interview, which aired in full Friday. “Because we go up and every time you go up they want to raise rates again. I don’t really… I am not happy about it.”
Again, however, markets largely shrugged off the comments and the dollar, which is highly sensitive to interest rate direction, only ticked down in value slightly. Further, the interest rate expectations that markets read from Fed fund futures offered no significant move.
Treasury Secretary Steven Mnuchin said Saturday that Trump was speaking in a personal capacity as regards his preference for low rates, adding that the president respected the Fed’s independence.