The Fed needs leaders other than Powell to step up to counter the Trump administration’s blatant attempts to undermine its independence, @jonathanjlevin says. Neel Kashkari is showing his colleagues how (via @opinion) https://t.co/Vg9kLQoxqv ...

Core Viewpoint - Kevin Warsh is considered a reasonable choice for the next Federal Reserve chair, with significant experience from his previous tenure during the Global Financial Crisis, but the challenge lies in maintaining the Fed's independence from political influence [1][2][3]. Group 1: Credentials and Experience - Warsh has a strong background in financial markets, having worked at Morgan Stanley and served as an economic advisor to President George W. Bush before his time on the Fed's Board of Governors from 2006 to 2011 [3][4]. - His experience during the 2008 financial crisis is highlighted as a critical aspect of his qualifications for the role [3][4]. Group 2: Challenges Ahead - The main concern is whether Warsh can ensure that interest rates are determined by economic conditions rather than political pressures, particularly from President Donald Trump, who has expressed a desire for lower rates [2][5]. - Maintaining the Fed's independence is emphasized as a crucial factor for Warsh's legacy as chair, with various economists stressing the importance of this independence [5][6].

>> FOR FINANCIAL MARKETS, JANUARY CAME IN LIKE A LION, BUT GOES OUT LIKE A LAMB. LIVE AT BLOOMBERG HEADQUARTERS IN NEW YORK, I ROMAINE BOSTICK. >> I'M KATIE GREIFELD.WATCHING THE CLOSING, THE BIG NEWS IS PRESIDENT TRUMP NOMINATING KEVIN WARSH AS THE NEXT FED CHAIR. WHAT AN INTERESTING CROSS ASSET PICTURE WE HAVE TO LOOK AT. THE S&P 500 DOWN BY .60%.VERY SLIGHTLY POSITIVE FOR THE WEEK. YOU LOOK AT THE CURVE, INTERESTING REACTION IN THE TREASURY MARKET TRANSLATING INTO YOUR FIVE 30'S CURVE HIGHER BY ABOUT FOU ...

Core Viewpoint - President Donald Trump has nominated Kevin Warsh to be the next chairman of the Federal Reserve, which may lead to a contentious confirmation process in the Senate [1] Group 1: Nomination and Background - Kevin Warsh, aged 55, previously served on the Federal Reserve Board of Governors from 2006 to 2011 and was considered for the Fed chair position when Trump nominated Jerome Powell in 2017 [1] - Jerome Powell was confirmed in a bipartisan manner and reappointed during the Biden administration in 2022, but his term is set to expire in May [2] Group 2: Political Reactions - Some Republican senators have expressed concerns about the nomination process, with one senator vowing to block any Fed nomination unless the Department of Justice (DOJ) drops its investigation into Powell [5][12] - Senate Banking Chair Tim Scott emphasized the importance of accountability and credibility in the Federal Reserve, stating that Warsh's nomination reflects this focus [7][8] - Senator Elizabeth Warren criticized the nomination, suggesting that Warsh's loyalty to Trump was prioritized over the Fed's independence [10] Group 3: Support and Criticism - Senator Thom Tillis acknowledged Warsh's qualifications but reiterated his opposition to any Fed nominee until the DOJ's inquiry into Powell is resolved [12][13] - Senator Cynthia Lummis expressed the need for the Federal Reserve to embrace digital assets and innovation, supporting Warsh's nomination [16] - Senator Dave McCormick praised Warsh as a suitable candidate to fulfill the Fed's mandate of maintaining inflation control while promoting growth and job opportunities [18]

Market Overview - The S&P/TSX composite index decreased by 992.37 points, closing at 32,023.76 [1] - The Dow Jones industrial average fell by 529.07 points to 48,542.49, while the S&P 500 index dropped by 55.96 points to 6,913.05, and the Nasdaq composite declined by 225.71 points to 23,459.41 [2] Gold and Metal Prices - The April gold contract saw a significant decline of US$348.80, settling at US$5,006.00 per ounce, although gold prices have increased by over 70% in the past year [1] - The decline in metal prices is attributed to the announcement of Kevin Warsh as the new U.S. Federal Reserve chair, which strengthened the U.S. dollar and led to a selloff in gold and other metals [2][3] Federal Reserve Influence - The leadership of the Federal Reserve has a substantial impact on the economy and global markets, particularly regarding interest rate decisions that affect investment prices [3] - Concerns exist that President Trump's influence may compromise the Fed's independence, which has historically allowed it to make difficult decisions to address long-term economic issues like inflation [5] Technology Sector Impact - Large technology companies, particularly Microsoft, have contributed to market declines, with Microsoft experiencing a 10% selloff despite reporting stronger-than-expected earnings [6] - Investors are focusing on Microsoft's investment spending rather than its profit and revenue performance, indicating a shift in market sentiment towards tech stocks [6] Currency Exchange - The Canadian dollar traded at 73.69 cents US, a slight decrease from 73.99 cents US the previous day [6] Oil Prices - The March crude oil contract increased by 26 cents, reaching US$65.68 per barrel [7]

Core Viewpoint - Kevin Warsh's return to the Federal Reserve marks a significant shift in monetary policy philosophy, potentially leading to a tighter stance on inflation and a reduction in balance sheet expansion [10][15]. Background and Experience - Warsh served on the Federal Reserve Board from 2006 to 2011 during the global financial crisis, playing a crucial role in emergency lending programs and economic stabilization efforts [3][4]. - He has a background in investment banking at Morgan Stanley and served as a special assistant to President George W. Bush for economic policy [8]. Criticism of Current Fed Policies - Warsh has been critical of the Fed's post-financial crisis monetary policy, arguing that it has gone too far in stimulus measures, which could lead to future crises [6][9]. - He has expressed concerns about the credibility of the current Fed leadership and has called for a "regime change" within the institution [8][9]. Appointment and Expectations - President Trump appointed Warsh, highlighting his extensive background and suitability for the role [7][17]. - Warsh's appointment is expected to shift the Fed's approach from a consensus-driven model under Jerome Powell to a more independent and potentially hawkish stance [10][15]. Potential Challenges - Despite Warsh's hawkish reputation, there may be resistance from other Federal Open Market Committee members regarding aggressive rate cuts until inflation trends are more favorable [13][16]. - Warsh's confirmation in the Senate may face political hurdles, particularly due to ongoing investigations involving the Fed [18][19].

>> WHERE WE ARE RIGHT NOW IS A MARKET THAT HAS A LOT OF EXPECTATIONS BAKED IN. >> EARNINGS ARE AT A RECORD HIGH AND GOING HIGHER. >> IT IS SHOWING TOPLINE GROWTH.>> EARNINGS GROWTH WILL BE THE LIFELINE GOING FORWARD. >> STOCK PRICE FOLLOWS EARNINGS. >> THIS IS "BLOOMBERG SURVEILLANCE" WITH JONATHAN FERRO, LISA ABRAMOWICZ, AND ANNMARIE HORDERN.JONATHAN: LIVE FROM NEW YORK CITY THIS MORNING, GOOD MORNING, GOOD MORNING. FOR OUR AUDIENCE WORLDWIDE, "BLOOMBERG SURVEILLANCE" STARTS RIGHT NOW. COMING INTO FRIDAY, ...

Group 1 - The Federal Reserve announced that it will maintain the federal funds rate target range at 3.5% to 3.75%, aligning with market expectations [1] - The Federal Open Market Committee (FOMC) indicated that current indicators show the U.S. economy is in "robust expansion," but uncertainty regarding the economic outlook remains high [1] - Employment growth continues to be sluggish, with some signs of stabilization in the unemployment rate, while inflation remains at elevated levels [1] Group 2 - Fed Chairman Jerome Powell stated that future monetary policy decisions will be based on new data, with 10 out of 12 FOMC members supporting the decision to maintain rates [2] - Powell mentioned that the current federal funds rate is generally "neutral," and core inflation in the U.S. is expected to reach around 3% by December [2] - If inflation peaks and begins to decline as previously anticipated, the Fed may consider easing monetary policy, especially if the labor market does not stabilize [2] Group 3 - Powell advised the next Fed chair to avoid involvement in electoral politics, emphasizing the importance of maintaining the Fed's independence [3] - The market currently estimates an 88.6% probability that the Fed will keep interest rates unchanged at the next monetary policy meeting, an increase from 82.7% the previous day [3]

Core Viewpoint - The Trump administration has initiated a series of attacks on the Federal Reserve, including a criminal investigation into its chair, Jerome H. Powell [1] Group 1 - The administration's actions represent a significant escalation in its criticism of the Federal Reserve [1] - The investigation into Jerome H. Powell raises concerns about the independence of the Federal Reserve [1] - This situation may impact market confidence and the Federal Reserve's decision-making process [1]

Core Viewpoint - The US dollar index has reached a 4.25-month low, primarily influenced by speculation regarding potential currency intervention with Japan and domestic political uncertainties [1][2]. Group 1: Currency Market Dynamics - The dollar index (DXY00) has decreased by 0.79%, hitting a 4.25-month low [1]. - Speculation about US coordination with Japan for currency intervention has contributed to the dollar's decline, as it aligns with President Trump's view that a weaker dollar benefits US exports [2]. - The yen has appreciated to a 2.5-month high against the dollar, influenced by reports of US authorities checking dollar/yen prices, indicating possible intervention [2]. Group 2: Political and Economic Factors - Political risks are prompting foreign investors to withdraw capital from the US, exacerbating the dollar's weakness [3]. - President Trump's threat of 100% tariffs on US imports from Canada if Canada signs a trade agreement with China has added to the uncertainty surrounding the dollar [4]. - The potential for another partial US government shutdown is creating additional pressure on the dollar, with Senate Democrats threatening to block funding deals [5]. - Concerns regarding the Federal Reserve's independence, a growing US budget deficit, and increasing political polarization are also contributing to the dollar's decline [5]. Group 3: Economic Indicators - ADP reported that US private payrolls increased by an average of 7,750 per week in the four weeks ending January 3, marking the smallest job growth in six weeks [6]. - The Conference Board's US January consumer confidence index unexpectedly fell by 9.7 points to an 11.5-year low of 84.5, which is weaker than anticipated [6].