Fed Independence & Political Influence - The potential firing of Fed Governor Lisa Cook by President Trump raises concerns about the legality of the move, the independence of the Fed, and the outlook for monetary policy [1] - The market may not react negatively to a perceived lack of Fed independence, prioritizing immediate easy monetary policy over long-term inflation concerns [24] - The Federal Reserve is potentially becoming permanently politically marked, similar to the Supreme Court, influencing how it's perceived and judged [30] Monetary Policy Outlook - Market probabilities initially showed an 82% probability of a rate cut in September, with a slight increase from 34% to 42% for a second cut in October following the news [5] - The market was already pricing in a dovish Fed, with the December 2026 Fed funds contract at 3% [20] - A Trump-controlled Fed board could potentially eliminate the 12 district presidents, effectively giving the president full control of monetary policy [6] Potential Market Reactions - Key indicators to watch for market concern about Fed independence are the dollar, the bond market, and then the stock market [25] - The strength of the American economy and the liquidity of US dollars globally might make the market immune to concerns about Fed independence [26] Board Composition - Replacing Cook would potentially give Trump a majority on the Fed board [5] - Current board members have varying degrees of perceived independence, with some seen as more likely to align with the president's views [18][19]

So, we got some breaking news just as we are coming on the air tonight. President Trump is purporting to have fired a member of the board of governors of the Federal Reserve. Her name is Lisa Cook. She's been a Fed governor since 2022. She is the first black woman to serve on the Fed board and its 111-year history. And in that entire 111 year history, no member of the Fed's board has ever been fired by any president. And that's not because presidents haven't wanted to do it. It's because a president is not ...

good to see crypto acting as a hedge against arbitrary centralized monetary policy here https://t.co/Zv8k1XxTCl ...

Welcome back. Markets once again betting heavily on a September rate cut following Chair Pal's much talked about pivot in Jackson Hole on Friday. Joining me now to discuss David Zervos.He's Jeffrey's chief market strategist. Also said to be on the list of possible next Fed chairs. Welcome.I think it's our first interview. I'm glad to welcome you to our program. >> Good to be here, Scott.You happy with what you got from Jackson Hole. >> I am. I think it was uh it was a pivot toward a lot of what uh folks lik ...

President Trump’s attempts to control monetary policy became the dominant—but unspoken—theme at the annual Jackson Hole central bankers’ retreat https://t.co/FCJcOa9y6i ...

President Trump’s attempts to control monetary policy became the dominant—but unspoken—theme at the annual Jackson Hole central bankers’ retreat https://t.co/yC0wMSvbLE ...

Economic Outlook & Monetary Policy - The industry acknowledges a complicated economic context with mixed indicators, requiring a balanced approach to the dual mandate of inflation versus labor [1][2] - The industry recognizes upside risks to inflation related to tariffs and downside risks on the labor market, necessitating a balancing act in monetary policy decisions [4] - The industry emphasizes the importance of real-time decision-making amidst uncertainty, balancing data analysis with insights from companies regarding employment and pricing plans [4][5] - The industry notes that while job growth has slowed, some labor market indicators remain healthy, suggesting a need for careful consideration of downside risks [7] - The industry observes that inflation has crept higher, moving in the wrong direction compared to previous expectations [8] - The industry anticipates inflation to remain elevated for the rest of the year into early next year, potentially with a larger and more persistent impact due to tariff impacts [12] - The industry views current monetary policy as modestly restrictive, appropriate for elevated inflation, but acknowledges the need to dial back restrictiveness if labor market risks worsen relative to inflation [17][18] Inflation & Tariffs - The industry is focused on the impact of tariffs on prices, considering not just direct imports but also the broader range of goods and services relying on imported intermediate goods [10][11] - The industry expresses concern about high price levels and the importance of restoring price stability [10] Labor Market - The industry is balancing the commitment to restoring price stability with the understanding that preserving healthy labor markets is crucial [14] - The industry sees risks on both sides, with the potential for a rapid rise in unemployment or a more long-term, steady rise in inflation [15]

Monetary Policy Stance - The Fed is likely to move rates down, possibly starting with a 25 basis point (0.25%) cut as early as September, viewed as an insurance cut against downside risks to employment [1][2] - The Fed will be very focused on ensuring long-term inflation expectations remain contained and consistent with 2% [2] - The current policy is viewed as modestly restrictive, allowing room to reduce restrictiveness while still addressing inflation and protecting the labor market [3] - The Fed's future actions will be data-dependent, with potential adjustments to the policy stance based on incoming data between now and the September meeting [4] Labor Market Dynamics - The labor market is experiencing moderating demand and supply, keeping the unemployment rate low, but this balance could shift if demand weakens more than supply [7] - Significant deterioration in the labor market could prompt further rate cuts to address the issue [8] Inflation Concerns - The Fed must be careful not to give up the fight against inflation, as one-off price changes can become inflationary if monetary policy is not appropriately managed [8][9] - Balancing both sides of the mandate (employment and inflation) requires careful consideration of economic signals and policy path [9] Communication and Transparency - Fed Chair's speeches provide guidance to other committee members, offering insights into the Chair's perspective on the economy [5] - The market's interpretation of "adjusting" policy stance as plural may be incorrect, as the Fed is expected to proceed carefully [6] - The upcoming Summary of Economic Projections (SEP) will offer insights into the FOMC participants' views on future policy and economic projections [10]

Inflation Concerns - Inflation is too high and has been trending higher [2][3] - The current inflation rate puts a real pinch on lower income households [4] - Inflation has been above the target for four years, requiring control [4] Monetary Policy Outlook - The Federal Reserve chair is open-minded about the right policy stance for September [2] - The current economic situation presents a challenging time for monetary policy [3] - Expectation is that inflation may continue to rise, and unemployment may also rise [3] Employment Situation - The employment side is reasonably close to full employment [2] - Employment has been balanced and healthy for the better part of a year [2] - Unemployment has been pretty consistent in the 4% to 43% range [3]

Federal Reserve Independence - The Federal Reserve should maintain its independence on monetary policy to ensure great outcomes for the American public [1] Allegations Against Lisa Cook - There are circulating allegations regarding Lisa Cook and potential mortgage fraud [1] - The speaker refers to Lisa Cook's statement regarding the allegations [2] - The speaker considers Lisa Cook an outstanding economist and a person of high integrity [1]