Market Commentary

Non-Shooting Wars


As other countries lower interest rates it makes our dollar stronger even though the Fed has lowered as well. A strong dollar makes exports more expensive and imports less despite president Trump’s increased tariffs on China.

This week China was accused of currency manipulation and there is no doubt that they did and do indeed manipulate their currency.  However, other countries, including the U.S., could be accused of the same thing as each country tries to manage their economies to spur growth. Not long ago a currency war was said to exist as every country raced to the bottom in lowering interest rates trying to boost their exports by using cheap currency to do so and thus expand their weak economies.

The fear today is the trade war, but part of the war China has expanded to a battle over currencies. China and the U.S. will need to come to an accord on trade for the whole war thing to go away. China is suffering far more than the U.S. over this battle but it is also affecting many other parts of the world.

The question is will it frighten the U.S. consumer and will that consumer slow his/her spending? Therein lies the danger to the U.S. economy.

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