Core Viewpoint - The U.S. Treasury Secretary, Becerra, expressed concerns that the Federal Reserve's operations, aside from the renovation project mentioned by the Trump administration, may impact the independence of FOMC's monetary policy [1] Group 1 - The influence of the Federal Reserve has become excessively large [1] - There is a call for the Federal Reserve to return to its core functions [1] - A desire for the Federal Reserve to internally address its own issues was expressed [1]

Group 1 - The U.S. Treasury Secretary, Mnuchin, stated that there is no urgency in determining the successor to Federal Reserve Chairman Powell, with potential candidates possibly coming from the current Board of Governors or regional Fed presidents [1] - Mnuchin mentioned a long list of excellent candidates, including himself, NEC Director Kevin Hassett, former Fed Governor Kevin Warsh, and current Governor Christopher Waller [1] - Powell's term as Fed Chairman will end in May next year, while his term as a Board member will last until January 2028 [1] Group 2 - Mnuchin criticized the Fed officials' interpretation of the impact of Trump's tariffs, claiming their analysis is somewhat flawed [2] - He noted that manufacturers and many retailers have absorbed a significant portion of the tariff costs, and many retailers' profit margins became very robust during the pandemic [2] - Mnuchin expressed surprise at Mohamed El-Erian's call for Powell to resign, emphasizing that an internal review of the Fed's activities could benefit both Powell and the institution [2]

Group 1 - The U.S. Treasury Secretary Scott Bessent stated that it is uncertain whether the EU can achieve a trade agreement similar to Japan's, emphasizing that Japan's success was due to its "innovative financing arrangement" [1] - Japan managed to reduce its tariffs from 25% to 15% through negotiations, which included a $550 billion fund for investment in the U.S. [1] - Bessent downplayed reports of the EU planning to impose a 30% retaliatory tariff on approximately €100 billion (about $117 billion) of U.S. goods, suggesting it is a negotiation strategy [1] Group 2 - Bessent mentioned that the EU's trade surplus with the U.S. means that any escalation in trade issues would have a more severe impact on the EU [2] - He indicated that there is no rush to determine the successor to Federal Reserve Chairman Jerome Powell, with potential candidates including current board members and regional Fed presidents [2] - Bessent confirmed that the process for selecting Powell's successor is underway, but emphasized that it will ultimately be President Trump's decision [2] Group 3 - Bessent expressed surprise at Mohamed El-Erian's call for Powell to resign, stating that an internal review of the Fed's activities could benefit both Powell and the institution [3] - He noted that the expansion of the Fed's functions is jeopardizing its monetary policy independence and suggested that an internal review could be a good starting point [3] - Regular meetings and ongoing communication between Bessent and the Federal Reserve Chairman are still taking place [3]

Core Viewpoint - The potential removal of Federal Reserve Chairman Jerome Powell by President Donald Trump could significantly impact the independence of the Federal Reserve, leading to an increase in long-term U.S. Treasury yields, particularly the 30-year yield, by over 50 basis points, while the 10-year yield may also begin to rise [1][9]. Group 1: Market Reactions and Predictions - Recent discussions around the Federal Reserve's monetary policy and the possibility of leadership changes have heightened market uncertainty, which may result in long-term U.S. Treasury bonds trading at a discount [2][3]. - The expectation for interest rate cuts by the Federal Reserve has decreased significantly, from a projected 75 basis points to less than 50 basis points, due to resilient macroeconomic data and inflationary pressures from tariff policies [2][11]. - The yield spread between 5-year and 30-year U.S. Treasury bonds has reached its steepest level since 2021, indicating that the market is pricing in the risk of Powell's potential dismissal [3][8]. Group 2: Political and Economic Context - Allegations against Powell, including claims of perjury related to the Federal Reserve's renovation costs, have been made by Republican lawmakers, which could further complicate the political landscape surrounding the Federal Reserve [4][8]. - The Trump administration's push for a more accommodative monetary policy could lead to increased inflation expectations and market risk premiums, thereby affecting long-term Treasury yields [8][11]. - The ongoing concerns regarding the U.S. government's borrowing needs and budget deficits are reflected in the elevated term premium for 10-year Treasury bonds, which is at its highest level since 2014 [11].

Core Viewpoint - President Donald Trump has intensified his personal attacks on Federal Reserve Chairman Jerome Powell, suggesting that Powell should resign if allegations of misleading Congress are proven true, and he advocates for a replacement who would lower interest rates [1][2]. Group 1: Trump's Criticism of Powell - Trump labeled Powell as "terrible" during a cabinet meeting and stated that if the allegations regarding misleading Congress are confirmed, Powell should resign immediately [1]. - Trump has repeatedly criticized Powell for maintaining unchanged interest rates, arguing that it is unsuitable for the current U.S. economy [1][2]. - Following Trump's comments, several government officials, including Federal Housing Finance Agency Director Bill Pulte, echoed calls for Powell's resignation, citing deceptive testimony regarding the Fed's headquarters renovation [2]. Group 2: Federal Reserve's Response - The Federal Reserve spokesperson declined to comment on Trump's remarks, maintaining a stance of non-engagement with political criticism [2]. - Powell has denied certain media reports about the renovation project, asserting that they are misleading and clarifying that no extravagant features are included in the renovation [3][4]. Group 3: Future of Powell's Tenure - Powell's term as Fed Chairman is set to expire in May 2026, and Trump has indicated he would prefer a successor who is willing to implement rate cuts [2][5]. - Trade advisor Peter Navarro suggested that if Powell does not support rate cuts in the upcoming Federal Open Market Committee meeting, other Fed governors should intervene [5][6]. - Trump has expressed conflicting signals regarding Powell's potential dismissal, indicating both a desire for a new chairman and a temporary reluctance to fire him [6]. Group 4: Potential Successors - Christopher Waller, a current Fed governor, is viewed as a strong candidate to succeed Powell, as he is seen as data-driven and capable of balancing market trust with Trump's desire for lower interest rates [7]. - Waller's previous support for rate cuts aligns with Trump's economic policies, making him a favorable choice for the administration [7].

Group 1 - The next Federal Reserve Chairman candidate announcement is imminent, with former Fed Governor Kevin Walsh being a popular choice according to President Trump [1] - Jerome Powell was nominated as Fed Chairman during Trump's first term and has been reappointed under President Biden, serving until May 2026 [6] - Trump has criticized Powell multiple times this year and has threatened to dismiss him, although Powell asserts that Trump lacks the legal authority to do so [6] Group 2 - Trump's early release of information regarding the next Fed Chairman is seen as a pressure tactic rather than a formal announcement [6] - The Federal Reserve operates independently from the government, and historically, presidents have not intervened in its monetary policy [6] - Trump's interference in Fed policy could undermine the accuracy and credibility of monetary policy and the dollar, as it may weaken the Fed's goals of price stability and employment [7]

Core Viewpoint - Federal Reserve Chairman Jerome Powell emphasized the importance of American higher education as a "critical national asset" during his speech at Princeton University, urging students to protect democracy amidst increasing tensions with the Trump administration [1][2][4]. Group 1: Importance of Higher Education - Powell defended U.S. higher education, stating that American universities are admired worldwide and play a crucial role in scientific innovation and economic vitality [3]. - He warned graduates not to take these institutions for granted and called for active defense of democratic values [4]. Group 2: Tensions with the Trump Administration - The Trump administration has recently attacked higher education by banning Harvard University from enrolling international students and cutting billions in funding for higher education [5][6]. - This conflict has escalated as Powell, appointed during Trump's first term, faces criticism for not lowering interest rates quickly enough, with Trump labeling him as a "big loser" [8]. Group 3: Independence of the Federal Reserve - Powell intends to serve his full term despite suggestions from Trump's economic team about potentially dismissing him before his term ends [8]. - The Supreme Court has indicated that the White House does not have the authority to interfere with the Federal Reserve's monetary policy independence through the dismissal of its members [8].