3 Things - Fed Independence, Bonds, Tariffs Endgame

2025-04-20 23:45:00 ET

Summary

• The biggest news of this past week was the potential for the President to fire employees of independent agencies. That would include Fed Chairman Powell. If we eliminate the independence of the Fed, then we’re much more likely to see a more procyclical overall policy.
• Since the tariff concerns started in late February, US government bonds have been a stellar performer. While US government bonds are up 3.2% this year, the foreign index is barely up 1%. So don’t read too much into a few days of trading.
• I keep trying to game this tariff thing out. Taking a look at the scenarios I see being most plausible.

Here are some things I think I am thinking about.

1) Fed Independence

The biggest news of this past week was the potential for the President to fire employees of independent agencies. That would include Fed Chairman Powell. I have no idea how plausible this is, but it does appear like something that’s increasingly likely. And as I’ve been saying for a while now, I am not sure how much it matters anyhow because Powell is out in May of 2026 and Trump will replace him with a yes-man. But what if Trump does fire Powell before then, and does it matter?...

Read the full article on Seeking Alpha

For further details see: