Arab Press

بالشعب و للشعب
Sunday, Apr 26, 2026

Trump's trade tweets have moved market's Fed expectations, Goldman says

Trump's trade tweets have moved market's Fed expectations, Goldman says

President Donald Trump's tweets on trade have much more of an impact on the market's expectations for Federal Reserve monetary policy than his tweets directly criticizing the central bank, Goldman Sachs said.

There’s only “weak evidence” that President Trump’s tweets criticizing the U.S. Federal Reserve move market monetary policy expectations, Goldman Sachs said in a research paper published Monday.

It said there is “strong” evidence that his trade-related tweets do affect market expectations of Fed policy.

President Donald Trump’s tweets on trade have much more of an impact on the market’s expectations for Federal Reserve monetary policy than his tweets directly criticizing the central bank, research by Goldman Sachs has showed.

There’s only “weak evidence” that President Trump’s tweets criticizing the U.S. Federal Reserve move market monetary policy expectations, Goldman Sachs said in a research paper published Monday, but there is “strong” evidence that his trade-related tweets do affect market expectations of Fed policy.

Last month, a new paper by the National Bureau of Economic Research said that Trump’s often-ferocious tweets criticizing the Fed and its Chairman Jay Powell influenced the way traders view interest rate trends.

But Goldman published its own research Monday in which it said its own analysis of Trump’s tweets – which included not only tweets that criticize the Fed but also tweets that directly or indirectly threaten tariff escalation – had only shown “weak evidence for the notion that the market moves its monetary policy expectations in response to Presidential tweets criticizing the Fed.”

By contrast, the bank said, “the evidence that President Trump’s trade-related tweets affect market expectations of Fed policy is strong.”

Goldman’s analysis of Trump’s tweets either criticizing the Fed, or of tweets that directly or indirectly threaten tariff escalation, was to measure the impact on market expectations for Fed policy by looking at the change in Fed funds futures prices one-year ahead from just before a tweet to 30 minutes after.

They then compared these potentially tweet-affected episodes with all other 30-minute intervals of market activity to see whether there were statistically bigger moves. They then accumulated all of the moves in fed funds futures following tweets in each category to obtain the overall impact on the market’s monetary policy expectations.

The Fed funds futures market is where traders bet on where the Fed’s benchmark overnight lending rate will land. Policymakers watch for changes in how markets view where interest rates are heading.

Goldman found that Trump’s tweets on trade, on which he has been vociferous amid an ongoing trade and tariff dispute with China, impacted the Fed funds futures market much more than those criticizing the Fed.

“The market moves are much larger, statistically highly significant, and more clearly skewed to the downside, ranging from -14 basis points (bp) to +4bp. Cumulatively, the impact on market expectations for the funds rate is about -40bp when we include tweets indicating escalation of trade tensions and tweets indicating de-escalation, and about -60bp when we focus only on tweets indicating escalation.”

“Once again, there are many tweets that garner little reaction, but there are also quite a few trade policy tweets that lead to sizable swings. This is intuitive, as there are clear channels through which tariff escalation can lead to a dimmer economic outlook,” Goldman said.

Goldman Sachs’ analysts interpreted the findings as showing “that markets believe the President primarily affects Fed policy indirectly by influencing the macroeconomic outlook, with at most a limited perceived role for tweets about the Fed.”


‘Boneheads’


Infamous for his Twitter rampages and rants, Trump is certainly not backwards in coming forwards to share his perspective on a variety of subjects -- not least of all the Fed.

He has repeatedly criticized the Fed’s monetary policy and called on Fed policymakers to slash interest rates amid concerns that the U.S. economy is faltering (largely seen as a result of Trump’s ongoing trade dispute with China), and he has regularly insulted the central bank’s chairman and policymakers.

In August, he called the central bank and its chairman “clueless” then in September he called them “boneheads” just before the Fed cut interest rates for the second time this year.

Following the rate cut, Trump tweeted that the Fed and its chairman had “no ‘guts,’ no sense, no vision!” Again, just last week, Trump called the central bank “pathetic.”

The Fed has cut its main interest rate in July by a quarter point and again in September, taking down its benchmark overnight lending rate to a target range of 1.75% to 2%. Trump has said the Fed is risking U.S. competitiveness by keeping rates substantially higher than most other nations in the developed world.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
News Roundup
Strategic Saudi-Bahrain Causeway Closed Amid Security Concerns as Trump Deadline Approaches
Saudi Arabia Keeps Red Sea Oil Exports Flowing Despite Regional Tensions
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
Saudi Business Leader Abudawood Appointed Chairman of Merit Incentives Group
TotalEnergies Confirms Damage at Saudi Refinery Following Security Incident
Saudi Arabia Launches Early Construction Phase for King Salman Stadium Project
Saudi Shift Away from Longstanding Dollar Oil Framework Gains Attention Amid Iran Conflict
Türkiye and Saudi Arabia Resolve Long-Running Transit Visa Dispute
Saudi Oil Capacity and Pipeline Flows Reduced as Supply Risks Intensify
TotalEnergies Reports Damage to Saudi SATORP Refinery Following Security Incidents
Gulf States Assess Prospects of U.S.-Iran Truce as Regional Stability Efforts Intensify
South Korea Resumes Honey Exports to Saudi Arabia Following Sanitary Approval
Saudi Arabia Carries Out Sentences in Eastern Province Following Security Convictions
Saudi Sovereign Wealth Fund Backs King Street’s Regional Credit Strategy
Saudi Arabia Secures World Cup Return as Egypt Celebrates Landmark Qualification
Iran and Saudi Arabia Intensify Diplomatic Engagement Amid Regional Tensions
Russia and Saudi Arabia Open Visa-Free Travel Corridor for Citizens
Saudi Oil Output Capacity Reduced by 600,000 Barrels Per Day Amid Regional Conflict
Saudi Arabia Suspends Operations at Select Energy Sites as Precautionary Measure
Saudi Arabia Halts Operations at Multiple Energy Facilities Amid Heightened Tensions
Global Markets Jolt as Iran Signals Ceasefire Breakdown and Rising Regional Tensions
King Street Aligns with Saudi Sovereign Wealth Fund to Expand Alternative Investments in Middle East
Attack on Saudi Arabia’s Jubail Petrochemical Hub Raises Global Supply Concerns
Debate Emerges Over Saudi Strategic Decisions as Gulf Cooperation Council Dynamics Come Into Focus
Saudi Arabia Expands Full Workforce Localisation to 69 Professions in Major Labour Reform
Emerging Alliance of Pakistan, Turkey, Egypt and Saudi Arabia Signals New Regional Power Dynamic Amid Iran Conflict
Iran Linked to Strikes Across Gulf States Following Refinery Attack Escalation
Saudi Arabia Voices Concern Over Fragile US–Iran Ceasefire Stability
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
Saudi Arabia’s Key East-West Oil Pipeline Targeted Following Ceasefire Announcement
Iran Targets Saudi Arabia’s East-West Oil Pipeline in Escalating Regional Tensions
Trump Warns of Civilizational Stakes as Iran Halts Negotiations
Saudi Companies Expand Remote Work Measures Ahead of Iran-Related Security Concerns
Iran Warns of Strikes on Saudi Energy Infrastructure if US Targets Its Facilities
Iran Urges Civilians to Form Human Shields Around Nuclear Sites as Diplomatic Deadline Approaches
Saudi Arabia Raises Oil Prices to Record Premiums Amid Supply Pressures Linked to Iran Conflict
Key Saudi-Bahrain Causeway Closed Amid Heightened Security Concerns Linked to Iran
Formula One Calendar Gap Explained as Fans Await Next Grand Prix
Growing Strain on the Petrodollar System Comes Into Focus Amid Iran Conflict
Reported Strike on Saudi Arabia’s Jubail Complex Raises Global Energy Supply Concerns
FedEx Introduces New Digital Tool to Streamline Imports into Saudi Arabia
Iran Claims Strike on Saudi Arabia’s Jubail Petrochemical Complex Amid Rising Regional Tensions
Taiwan to Source Oil Shipments from Saudi Arabia’s Red Sea Ports
Saudi Arabia Evacuates Riyadh Financial District as Precaution Amid Regional Tensions
Saudi Arabia Balances Ambitious Economic Vision Amid Regional Tensions and Financial Pressures
Budget Saudi Arabia Reports Strong Full-Year 2025 Financial Performance
Saudi Arabia Expands Investment in Capcom With Stake Reaching Six Percent
Saudi Arabia Assesses Significant Economic Impact From Regional Conflict Involving Iran
US Beef Secures Expanded Market Access in Saudi Arabia
×