BlackRock's global fixed income chief says the European Central Bank just turned up the pressure on the Federal Reserve to more toward easier policy.
, which could weaken the euro relative to the dollar. Trump has complained foreign governments intentionally weaken their currencies, making it hard for the stronger dollar to compete in global trade.Trump said in a tweet,
Draghi's comments came on the first day of the Fed's two day June meeting. At the end of the meeting Wednesday afternoon, the Fed is expected to release a revised statement and lowered economic and interest rate forecasts that will clear the way for it to cut interest rates, possibly as early as the July meeting.
"If the Fed didn't open the door widely to a significant cutting of rates, the dollar would appreciate and that's not where they want to go," he said. Rieder said for that reason, he expects the Fed could move in July, with a 50 basis point, or a half percentage point rate cut, double what some forecasters expect.
Trump has been critical of the Fed and specifically, Powell for rate hiking policies last year, and has been calling for a rate cut for several months. In response to a question Tuesday aboutyield was at the lowest since November, 2016, after Draghi's comments. But it later moved higher on a comment from President Donald Trump that he would meet with China President Xi Jinping for an extended meeting at the G-20 later in the month.
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