Economic News

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nycfan said:
Yes, it was, but economists have expressed surprise at that outcome under thee policies — pointing to countervailing forces of uncertainty and volatility of Trump’s shifting policy pronouncements and aims negatively impacting the strength of the dollar and bond markets even as his broadly described policies typically would be expected to strengthen the dollar.

The MAGA view is that the weakening dollar proves Trump is right and his madman/chaos theory of international relations also is working in international trade to produce results (weakening dollar despite significantly increasing tariffs) that traditional trade policy cannot — citing Nixon moving the dollar off the gold standard and implementing tariffs to devalue the dollar and improve the competitiveness of U.S. exports in 1971 as the model. [BTW, Nixon’s shock approach contributed to actions by OPEC that greatly strengthening OPEC’s economic power but that is a different story of unintended consequences]
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BTW, here is a good background article on the Nixon Administration response to the Oil Embargo that led to the petrodollar:

 
nycfan said:


“Markets are processing what’s going on … particularly trade policies … so markets are struggling with uncertainty and that means volatility … having said that [under the challenging circumstances]!markets are functioning the way they are supposed to function …”
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Independence of the Fed is an important structural reason for international reliance on the dollar. Firing Powell before the end of his term and replacing him with a Trump crony likely would shake the markets, especially the bond market and dollar value.
 
nycfan said:
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Independence of the Fed is an important structural reason for international reliance on the dollar. Firing Powell before the end of his term and replacing him with a Trump crony likely would shake the markets, especially the bond market and dollar value.
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“… On Wednesday, during a speech in Chicago, Powell said the central bank needed to make sure that any increase in prices from tariffs didn’t lead to continued inflationary pressures.

Powell said he didn’t believe the Fed’s independence to set interest rates as it sees fit would be compromised because it is “very widely understood and supported in Washington, in Congress, where it really matters.”

He added, “We’re never going to be influenced by any political pressure. People can say whatever they want. That’s fine. That’s not a problem. But we will do what we do strictly without consideration of political or any other extraneous factors.” ”

 

European Central Bank cuts interest rates, warns of ‘deteriorated’ growth outlook on trade tensions​



“… A rate cut was fully anticipated by markets, with an around 94% chance of a 25-basis-point trim being priced in ahead of the decision, according to LSEG data.

The cut takes the ECB’s deposit facility rate, its key rate, to 2.25%. At its highs in mid-2023 it had been at 4%.

Tariff developments in recent weeks are widely seen by analysts and economists as a key reason for the ECB to cut interest rates. Even though many of the initial duties imposed by the U.S., as well as retaliation measures, have been put on ice or eased, fears about how they could affect economic growth have been rife. …”
 
nycfan said:


“Markets are processing what’s going on … particularly trade policies … so markets are struggling with uncertainty and that means volatility … having said that [under the challenging circumstances]!markets are functioning the way they are supposed to function …”
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I don't need an explanation from Powell

He needs to understand that Trump is a genius playing 96 dimensional chess

He just needs to slash fed rates and everthing will be hunky dory
 

Trump Has for Months Privately Discussed Firing Fed Chair Powell​

The president hasn’t made a decision on whether to try to oust Powell, and some of his advisers have warned against the move​



“…In meetings at the president’s private Florida club, Mar-a-Lago, Trump has spoken with Kevin Warsh, a former Fed governor, about potentially firing Powell before his term ends and possibly selecting Warsh to be his replacement, the people said.

Warsh has advised against firing Powell and has argued that he should let the Fed chair complete his term without interference, according to the people. The conversations with Warsh carried into February, while others close to the president have spoken to Trump about firing Powell as recently as early March, the people said.

At a meeting in the Oval Office on Thursday, Trump expressed confidence that he had the authority to oust Powell. “If I want him out, he’ll be out of there real fast, believe me,” Trump said. The president added that he is “not happy” with Powell and accused him of “playing politics” with interest rates.

Any effort by Trump to fire Powell would almost certainly end up before the Supreme Court. It could leave a cloud of scrutiny over Powell’s ultimate replacement, and any prospect that the Fed chair could be sacked over a policy dispute would likely tank financial markets. …”
 
Trouble with this Powell talk is regardless if Trump fires him, Powell is done next year. At which point, Trump nominates Kid Rock to the fed chair, and the reckoning happens next year, when our international relationships and trade policy are even further in the shitter.
 
Healing said:
Trouble with this Powell talk is regardless if Trump fires him, Powell is done next year. At which point, Trump nominates Kid Rock to the fed chair, and the reckoning happens next year, when our international relationships and trade policy are even further in the shitter.
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I'd laugh if I weren't too busy crying.
 
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