“The major indexes were off as much as 0.4% following a report in Bloomberg that cited an unnamed White House official. CBS News reported that Trump asked Republican lawmakers if he should fire Powell.”The WSJIf this signals a less restrictive monetary policy it would have repercussions for investments - not all bad. Money market yields would likely fall. Mortgages might be cheaper for a while if less restrictive policy is coupled with some kind of
yield curve control. But farther out real assets should gain as inflation rises. The dollar would likely weaken. Lots of moving parts to sort out should the President end up with substantial authority to set / manipulate short-term interest rates now and down the road.
To state the obvious: If the report is true such a move would be contested in the courts.
Comments
We know that there is no actual macroeconomic plan here, but someone must be far more worried about a big drop in GDP (or job loss), from all the trade chaos, than they are about further stimulating inflation. It seriously implies that the decision makers are deeply concerned about second half numbers. Or are they trying to stimulate housing?
My best guess is that someone is telling Trump that the economy may crash and he is trying to head that off, while hoping inflation stays below 3%. What are the thoughts of others?
as a means to remove Powell "for cause."
https://www.msn.com/en-us/money/markets/white-house-seizes-on-fed-renovations-as-opening-to-oust-powell/ar-AA1Irf6x
If/when it all goes bust, he will blame Biden like he always does.
Something will have to give.
Though, the wording of "highly unlikely" is making me think the firing may yet happen, sooner than later.
Who leaked this? Allegedly Trump waved a draft of the “firing” letter in front of a bunch of Republican Senators last evening.
Wow. Like many of you I worked in a visible public sector occupation. Local / internal politics can be brutal. But I don’t know how Powell is coping. I’m not aware of any administrator ever waving around a draft of a letter calling for my dismissal - though it might well have occurred.
There’s a very good related thread on the issue in the OT section posted by @Observant1
To @DrVenture's point: I mean, they're now lobbing trumped-up allegations of waste and 'fraud' over building renovations at the Fed which happened on Powell's watch as a possible way to remove him as chair for cause, which is probably why he said what he said -- to keep the door open.
Their team probably look for new candidates in 6 7 months anyways. Powell prob did well past 10 yrs imho, probably a B graded. Our inflations are jacked up and probably massive defaults when nobody want to buy US-T in 12 24 months and rates are cut at record paced next 12 24 months. 1970s double bottom crash scenarios likely. have your cash parked [35% cash for me now]. I dont trust this market at all especially cryptos and stocks are extremely High P/E [SPY TECHS QQQ MAG7] . not sure if need to dca into more cryptos, so high now seem everyone want to sell stocks and add crypto/BTC
"I think he does a terrible job," Trump said when asked about Powell at the White House. "He's costing us a lot of money, and we fight through it … The country has become so successful that it doesn't have a big impact, but it does hurt people wanting to get a mortgage. People want to buy a house. He's a terrible fed chair."
Still, Trump said "no, we’re not planning" on firing Powell, despite reports indicating otherwise.
"I don't rule out anything, but I think it's highly unlikely," Trump said, unless he finds fraud with the Fed’s renovation project.
"There could be something to that. But I think he's not doing a good job. He's got a very easy job to do," Trump added.
Can we get back to focusing on the Epstein files now?
ADD: I recall some of the verbatim...."I can't believe he was appointed". He didn't recall he did the selection and appointment.
The rest of my thoughts about his chat today are expletive.
Sure thing! Here's this over in the OT section:
Send In The Clowns: Elon Musk mocks Trump's claim Epstein files are a hoax
The chairman is only one member of the FOMC, and has only one vote. Evidently Trump's knowledge of the FOMC doesn't extend to any great depth. Now there's a surprise!
Yes - if one were to assume logic in this matter it might well be a diversionary tactic.
Reality. The SP500 made another 1% since the above.
The SP500 is at high for the year.
TACO boy is very adept at redirects.
And for every 50 bps that the market inches up, BS1000 will take some kind of warped victory lap.....even though the skeleton of Biden would have had us at higher levels.
Finally non political comment how to make money and what this site is all about.
Several posters have tried to tie T comments to markets decline. When it doesn't happen and I point it out, they get personal.
As I said before I never invested based on politics or scary stories.
The 24/7 media have been doing a great job every time someone clicks and reads these articles.
”A top Federal Reserve official said late Thursday that the central bank should cut its key interest rate later this month, carving out a different view than that of Chair Jerome Powell, who has been harshly criticized by the White House for delaying rate cuts.”
”Waller, a Trump appointee, has previously said that he would support a rate cut in July. Michelle Bowman, also a Trump appointee, has also spoken in favor of a cut. Minutes to the Fed’s June 17-18 meeting said that only “a couple” of the 19 members of the central bank’s interest-rate setting committee supported a cut in July.”
Suppose it’s happened before, but I can’t ever recall a member of the FOMC speaking out vociferously like this against the prevailing committee sentiment and (presumably) the position of the current Chair.