Donald Trump’s cup should runneth over. On his second State visit to the UK – a rare privilege – he was greeted with all the pomp Windsor could muster.
Far away in Washington, the Federal Reserve, after nine months of sitting on its hands, finally delivered a quarter-of-a-percentage point interest rate cut to a 4 per cent-to-4.25 per cent range.
The reduction will not satisfy Trump or his acolytes. Even though consumer prices rose at a 2.9 per cent annual rate in August, Trump is agitating for a reduction of three full percentage points in the key rate.
The President has adopted a multi-front attack. He has disparaged the Fed chairman Jay Powell, castigated the central bank for wasting money on buildings and seeks to pack its Open Markets Committee with his own.
Trump wants to see Lisa Cook ousted, over alleged mortgage infringements.
He rapidly inserted Stephen Miran, the White House’s top economic adviser, onto the Fed without requiring him to vacate his previous role – blurring independence.
Salute: US President Donald Trump (pictured with wife Melania on his second state visit to the UK) is pushing for radical interest rate cuts from the Federal Reserve
The longer and harder he pushed, the less likely it became that the radical cuts would be delivered. A normal financial judgement has been politicised.
The Fed, in common with the Bank of England, was slow to raise rates when the pandemic sent prices sharply higher and has been behind the curve ever since.
Analysis shows it was 15 months late in raising rates when compared to previous cycles. Burned by the pandemic and Ukraine experiences it has been reluctant to rapidly lower rates this time.
The consequences have been adverse. Employment is vanishing, the housing market is stuck and bond yields are higher than they need be.
That adds to the cost of financing a ballooning US government deficit.
Unlike the Bank of England, the Fed has a duty to deliver jobs. There is a reluctance to go bold. Financial markets are in bubble territory with the Dow, Nasdaq, and S&P daily conquering new heights. Demand for crypto is unrelenting.
A combination of super-loose fiscal policy and easy money, if it goes too far, could be a prelude to bust.
Deep freeze
A quarter of a century has passed since Ben & Jerry’s (B&J) sold itself to Unilever, but the founders have never reconciled to the idea that control over the socially-conscious brand is exercised by a global corporation which must deal with realpolitik.
Nevertheless, the resignation of co-founder Jerry Greenfield comes at a difficult moment.
Unilever is well advanced in organising an exit from ice cream, under the Magnum Ice Cream rubric, and doesn’t need further geopolitical rows which could interfere or slow the proposed initial public offering.
The point of difference between Unilever and its adopted child has been the Middle East. B&J championed the Palestinian cause and, in 2001, objected to ice cream being sold in the occupied West Bank.
The guerrilla war between Unilever and the wayward charge has been on-and-off ever since, including a New York court battle.
Other big companies might have given in to the pressure, but it is a tribute to Unilever that it has declined to be bullied.
It has remained sensitive to the group’s Jewish roots and a presence in pre-Israel Palestine since the early 20th century.
B&J accuses Unilever of being silent over an alleged ‘genocide’ in Gaza.
Greenfield and fellow founder Ben Cohen have demanded that their creation be spun out of Magnum/Unilever at a fair market price of up to £1.8billion.
That’s a lot of tubs of cookies and cream. Magnum is not melting.
Price check
After the latest inflation data, the Bank of England will be in no rush to lower the bank rate today.
Consumer prices in Britain are rising at the fastest rate in the G7. Moreover, with food and alcohol prices up 5.1 per cent the biggest impact will be on working people who spend more of their income on groceries.
That is among the reasons why Chancellor Rachel Reeves is seeking to help – and may remove VAT from power bills.
Service sector inflation and wage bills are edging down. But not by enough for Governor Andrew Bailey to be brave.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .