Opinion | America’s creditors are fed up with Trump’s squander of US economic growth as he picks fights

Donald Trump is irked about many things – China’s trade policies, Russia-related investigations, critics in the media. Now, add the Federal Reserve to the US president’s fed-up list.

Trump finding a foe in his own Fed head, Jerome Powell, would be dreadful for Asian economies, companies and investors. The spectre of the most powerful leader brawling with the world’s top monetary authority throws yet another imponderable at a region on the ropes.

In 2013, developing markets quaked at the mere prospect of Fed “tapering,” never mind assertive tightening. Back then, Morgan Stanley made a “fragile five” list clumping India and Indonesia together with perennial weak links Brazil, South Africa and Turkey. Now, Asia needs to worry about Fed tussling.

That puts Powell in an impossible situation. Hiking interest rates at the forthcoming policy meeting from July 31 to August 1 could have Trump slamming the Fed on Twitter. Throttling back could increase overheating risks. Either outcome risks denting the dollar’s credibility and driving up US bond yields.

Trump, let’s remember, added to Powell’s stress level with a US$1.5 trillion tax cut, which an economy at full employment didn’t need. What did the former businessman think would happen when he tossed additional financial lighter fluid at a blazing economy?