The impact of a Donald Trump tweet on the value of assets might be losing its punch, according to a leading economist.
The president has mastered the use of the microblogging site to set the news agenda and pump out headline-style messages to his 53 million followers.
Trump’s Twitter account has rattled markets with nuclear threats to North Korea, a promise to enforce tariffs on a huge amount of global trade, as well as warnings over the U.S.’ relationships with countries generally considered allies.
The occasional call for the U.S. and other countries to build infrastructure and raise defense spending has also sent asset managers scurrying to revaluate portfolios.
The tweet, dramatic with its use of upper case syntax, was in response to Rouhani cautioning Trump on Sunday about pursuing hostile policies against Iran.
In response to the war of words, the price of oil rose slightly. Brent crude climbed back above $74 per barrel as traders factored in a ratcheting up of tensions between Washington and Tehran.
And while U.S. stocks pulled back Monday, the move was hardly major. The Dow Jones Industrial Average fell 18 points at the open of trade while the S&P 500 and Nasdaq Composite traded just below the flat-line.
Paul Donovan, the global chief economist for Swiss firm UBS Wealth Management, said in a note Monday that while the tweet over Iran may be serious, markets are beginning to look through the president’s online activity.
“After Trump’s tweeting threats against North Korea and the fact that North Korea still seems to be carrying on with its nuclear program unimpeded, it would appear that markets are not inclined to take Trump’s tweets seriously,” he said.
The president had issued a series of aggressive tweets in the weeks leading up to June’s historic summit with North Korean leader Kim Jong Un. That shock meeting led many to praise Trump’s blunt style of diplomacy.
But the top U.S. military commander on the Korean peninsula, Army Gen. Vincent Brooks, admitted Saturday that North Korea’s nuclear capacity remains very much intact, leaving Trump’s harsh rhetoric looking somewhat hollow.
Trump has also used Twitter to criticize the Federal Reserve’s monetary policy, suggesting that rate rises are wrong. Fed officials, including Chairman Jerome Powell, have raised interest rates twice this year and have pointed to two more rises before the end of 2018.
Trump’s tweeted comments came after his initial critical remarks about the Fed were broadcast by CNBC during an exclusive interview that saw the president express frustration with Fed policy.
“I’m not thrilled,” he told CNBC’s Joe Kernen in the interview, which aired in full Friday. “Because we go up and every time you go up they want to raise rates again. I don’t really… I am not happy about it.”
Again, however, markets largely shrugged off the comments and the dollar, which is highly sensitive to interest rate direction, only ticked down in value slightly. Further, the interest rate expectations that markets read from Fed fund futures offered no significant move.
Treasury Secretary Steven Mnuchin said Saturday that Trump was speaking in a personal capacity as regards his preference for low rates, adding that the president respected the Fed’s independence.
Originally published at CNBC