The series of economic and financial developments on Friday was a strange, puzzling and exhausting microcosm of why the world economy was at risk of collapse.
It showed the strange interaction between the Chinese government's actions in the escalating trade war with the United States, sober-minded global central bankers with limited deployment power, and an American president whose public statements often appear driven by complaints of more than strategy.
President Trump arrives in France on Saturday for a meeting of the group of 7 industrialized nations, which set off fireworks and confusion. In a dizzying day, he seemed to be looking for whom or what to blame for economic problems, first using Twitter to call his own Federal Reserve chief an enemy of the United States and then urge US companies to stop doing business with China.
The world economy may still turn out well; most economic data in the United States is solid. But if there is a recession next year and a breakdown in international trade, the episode's stories may spearhead Friday's clash of official action at Beijing government offices, the Grand Tetons of Wyoming and the Oval Office.
It became clear in real time how the risks of an escalating trade war and the destruction of longstanding financial and political ties could quickly surpass the ability of central banks – the normal first responders to economic disasters – to do something about it.
President Trump's first approach adds to the risks at a delicate moment with major economies in Asia and Europe already making efforts and the ability of politicians to cope with the damage in question.  "The escalation, the unpredictability, the volatile nature of policy developments are fundamental to what is happening, and these are not things you can include in an economic model," said Julia Coronado, president of MacroPolicy Perspectives, economic consulting. "Something is breaking. It is very dangerous. "
A single news cycle makes it clear how these different policy areas can affect one another in unpredictable ways.
After Friday, in the United States, China announced it would impose tariffs of $ 75 billion in US goods coming into force on September 1. The new US tariffs on Chinese goods will come into force on the same day.
Although not good news for those who hope that between the two largest economies in the world may be commercial peace was achieved, it was proportionate – more tit-for-tat reaction
At 10:00 a.m. Eastern Federal Reserve Chairman Jerome Powell gave a speech in Jackson, Wyoming, where leading central bankers gather every August for an economic symposium. eager for any sign of what the Fed will do next.
The financial markets are increasingly pointing to a declining economy of the United States. But by most measures, growth continues and the labor market is quite healthy. Will the Fed take preventative action in response to these market changes and some evidence that business confidence is slipping away?
Mr. Powell delivered a nuanced speech signaling that the Fed is committed to a risk management approach to tailoring policies to try to prevent bad things from happening. His words kept the Fed's options open.
But he made it clear that the gap in global trade relations was not the kind with which the Fed's interest rate policies were well adapted.
"As long as monetary policy is a powerful instrument," Mr. Powell said, "it cannot provide a well-established regulation on international trade. "The central bank can only adjust the policy to try to respond to ways that changes in trade policy affect the overall outlook. If volatile trade policies undermine the economy, the Fed's instruments may have only limited options to overcome the damage. Reducing interest rates. in this situation it would be like giving painkillers to someone with a broken bone – better to have than not, but unable to solve the underlying problem.
The speech clearly did not align well with White  President Trump, who called on the Fed to cut interest rates by a full percentage point, issued a series of tweets at 10:57 a.m. that aroused the "weak Fed" and asked : " My only question is he, who is our bigger enemy, Jay Powell or President Xi? "
He followed this with those who urged American companies to invest from China. The stock market, which was stable after Powell's speech, fell.
At 5 pm, after the financial markets closed, the president tweeted that the trade war was escalating further, applying a 15 percent tariff of $ 300 billion on Chinese imports beginning on October 1 and raising the rate to $ 250 billion at imports up to 30 percent from 25 percent.
The disconnect between sobriety, cautious central bankers and a chaotic policy that puts the economy at risk is not specific to the United States. The Jackson Hole Symposium also featured Bank of England Governor Mark Carney, who described a limited ability to use monetary policy to offset the damage from a potentially shattered British exit from the European Union this fall.
"After all, monetary policy can only help smooth out the adjustment to the underlying real shock that would lead to a sharp Brexit without a deal," said Mr Carney, and this ability will be limited by the need to maintain
Beyond trade wars and Brexit, Mr. Powell's speech cites potential Chinese counteraction in Hong Kong protesters and the volatility of the Italian government as factors for a tumultuous summer for the financial markets.
2019 Nestaby The political environment in many large global economies continues to pose new risks, both for the financial markets and for businesses and consumers who make economic decisions every day.
But this is not like 2007 and the 2008 crisis. when the central banks came together to cope with the potential collapse of the global financial system.This episode, as scary and catastrophic as it was, was well suited to the instruments available to the central banks.
This is not the case. It is reassuring to think that there are a bunch of wise men and women behind the scenes that do not allow the global economy to fall into the gutter.
The lesson of the last few months is that forces are deploying that they can't do much to contain. And if Friday is a guide, being cautious and sober can even make things worse.