By Jason Bone for the Daily Mail
The stock market bounced back strongly on Friday in a relief rally after Donald Trump’s ‘subpoena’ of Apple CEO Tim Cook to talk about how much the president knew about a massive tax scam ended up being nothing more than an urgent inquiry into when the board will tell him he is fired.
Former Federal Reserve Governor Kevin Warsh also faced a rocky ride on live television as news that Trump had proposed an emergency budget on Friday night turned the 30-year-old programme into a much more serious episode of Midnight Special.
The president launched a thinly-veiled attack on the Republican establishment at the Federal Reserve on Friday night
Mr Warsh, who was considered as a possible candidate for the job of Fed chairman in the aftermath of the 2008 financial crisis, was clearly dismayed by the unprecedented decision, which has effectively ground the Fed into a spineless state.
Mr Warsh said it was ‘unusual and unusual’ for the president to consider a major decision with his brain trust rather than just kicking it to a committee for rubber-stamping.
After which, Republican establishment figures who were not sure whether the Fed was too friendly to the president, suddenly saw if they could get him to fire Mr Warsh himself – and they were successful in that attempt.
It wasn’t just Trump supporters celebrating: markets still retain faith in the economy despite sceptics’ recent stock market meltdown and the household debt-to-income ratio rising faster than it did before the financial crisis.
Markets rise by the moment we were told the news on Trump’s huge tax plan.
Robert Caret, chief economist at Natixis Asset Management, said: ‘The markets are modestly buoyant after Mr Trump’s special counsel investigation order.
‘The president’s proposed new budget suggests the US tax system is undergoing an economic transition. The way we are allocated is changing, and the change means the Fed’s heavy-handed approach to interest rates may have to change.’
After Fox News host Jim Cramer tweeted this message earlier in the day that a sign of a stronger economy was ‘when ppl send a thousand times more money into your stock as an example of confidence,& refocuses on company growth rather than government spending’, the number of shares bought and held through formal electronic buying and selling across the stock market shot up.
Signs of recovery: The stock market bounced back strongly on Friday in a relief rally after Donald Trump’s ‘subpoena’ of Apple CEO Tim Cook to talk about how much the president knew about a massive tax scam ended up being nothing more than an urgent inquiry into when the board will tell him he is fired
Traders lifted shares and took place in a feeding frenzy as finance professionals piled back into high-flying shares.
After the president launched a thinly-veiled attack on the Republican establishment at the Federal Reserve on Friday night, Jim Cramer went on to elaborate that it was a sign of a stronger economy when people who are jittery are putting their money into things like Apple.
The order to Apple to hand over documents came after a grilling by the House Intelligence Committee. The president’s intervention was highly unusual and raised eyebrows even among some of his opponents, but suggested he is already a marked man when it comes to the growing investigation into allegations of Russian interference in the US election, directed against him.
He also appeared to lash out at the Fed’s chairman, Jerome Powell, after the central bank raised interest rates this week, giving traders exactly what they wanted.