Federal Reserve & Administration Conflict - The administration desires a lower interest rate policy and wants the Federal Reserve to cut interest rates by 200 to 300 basis points [2] - Concerns exist that the administration is applying political pressure on the Fed to lower interest rates, potentially using supervisory requirements and even headquarters renovations as leverage [3] - The market is questioning the Fed's independence from the administration, impacting perceptions of its autonomy [6][7] - A potential solution is for the White House to tone down its rhetoric regarding the Fed [8] Market Impact & Bond Market Reaction - Long-term bonds sold off when news initially suggested the president planned to fire Fed Chair Jerome Powell [6] - Prices for long-term bonds rebounded when the president indicated he was not planning to fire the Fed chairman [7] - The bond market is questioning the Fed's resilience to political pressure and its ability to maintain control of monetary policy [11] Jerome Powell's Position - Mohamed El-Erian suggested that Chair Powell should resign to safeguard the Fed's operational autonomy [5] - Powell is expected to face tough questions at the upcoming Fed meeting regarding political considerations in setting interest rate policy [9][10] - The key question for Powell is whether he feels compelled to hold interest rates steady in the face of political pressure [10]

I just read a piece uh from uh from the op-ed that you wrote uh with Ben Bernanki. Yes. And then I followed up by saying that we had talked to Scott Besson and we had asked a similar question of of actually Elizabeth Warren recently which is if in fact Jay Powell were to be fired, ousted or otherwise pushed out, what would the market's reaction actually be.Well, I think we got a taste of that um when President Trump announced that he had shown a letter to Republicans uh that would call for Chair Powell's ou ...

🇺🇸 JUST IN: Treasury Secretary Bessent says, “the central bank should conduct an exhaustive internal review of its non-monetary policy operations.” https://t.co/4x9tENJajp ...

did say something like we should there should be some sort of investigation into the Fed's efficacy and track record. What do do you do you have questions about that just in terms of targeting inflation. I mean they were late. They were late.They thought inflation was transitory. Now it's not clear whether they're late uh when it comes to cutting rates again. But issues like that them using certain models, academic, PhD economists, the group think are are there are there real questions to ask around all thi ...

Would you just offer up what your opinion would be uh on firing JPL if the president were to do that. Do you think that would be a good idea or would you dissuade him from that. Uh look uh Joe, I I think that what we need to do is examine the entire Federal Reserve institution and whether they have been successful.I I'm speaking actually I'm going to be in the building this evening. Uh there is a regulatory conference that begins tomorrow. Uh I I'm the keynote speaker tonight talking about regulation.Uh the ...

Investors preparing for the European Central Bank’s interest rate-setting meeting on Thursday should also focus on a plethora of economic reports this week to gauge where monetary policy is headed. https://t.co/EEEM1PWn66 ...

Donald Trump's attacks on the Fed are not just about its chairman, Jerome Powell. In fact, they're not really about Jerome Powell at all. The attacks are about whether we still believe America's central bank should be insulated from political interference.It's about turning one of the most trusted financial institutions in the world into a partisan weapon. And it's understandable if you don't think that much about the Fed at all. But the consequences of Trump's relentless attacks on Powell are more dangerou ...

Summary of Key Points from the Conference Call Industry or Company Involved - The discussion primarily revolves around the Federal Reserve (Fed) and its leadership, particularly focusing on Fed Chair Jerome Powell and the implications of potential political influences on monetary policy. Core Points and Arguments 1. **Presidential Influence on Fed Leadership** The president's remarks about potentially removing Fed Chair Powell raise questions about the nature of such a removal, whether it would be "at will" or "for cause" [1][10][15]. 2. **Supreme Court's Role** The Supreme Court's decision in Trump v. Wilcox may protect Fed governors from being removed at will, indicating a unique status for the Fed compared to other federal agencies [1][11]. 3. **Structure of the Federal Reserve** The Federal Open Market Committee (FOMC) consists of twelve members, including seven governors nominated by the president, which limits the president's ability to influence monetary policy directly [2][8]. 4. **Terms of Governors** Governors serve a 14-year term, with the possibility of reappointment, which means the president has limited opportunities to influence the Board's composition during their term [2][6]. 5. **Historical Context of Leadership Roles** The powers of the Chair and Vice Chair are not significantly greater than those of regular governors, but they historically receive considerable deference from other committee members [3][14]. 6. **Potential Legal Challenges** If the administration attempts to remove Powell "for cause," it could lead to a lengthy legal process, which may negatively impact market perceptions [15][17]. 7. **Impact of Political Interference** Analysts believe that reducing the Fed's independence could lead to higher inflation risks and increased long-term interest rates, adversely affecting economic activity [16][17]. 8. **Historical Precedents** The historical record suggests that political interference has previously led to poor monetary policy outcomes, particularly in the late 1960s and early 1970s [16]. Other Important but Possibly Overlooked Content 1. **Demotion of Leadership Roles** There is uncertainty regarding whether the administration can demote a governor from their leadership position, as the Federal Reserve Act does not explicitly provide "for cause" protection for these roles [12][14]. 2. **Recertification of Regional Reserve Bank Presidents** The presidents of the regional Reserve Banks are recertified every five years, which is typically a formality, but could be influenced by the current administration [7]. 3. **Public Perception and Communication** The president's public remarks on monetary policy can influence perceptions, although historically, Fed actions are dictated more by economic conditions than by presidential influence [9]. 4. **Long-term Economic Implications** Any reduction in the Fed's independence could lead to market participants demanding greater compensation for inflation risks, which could further complicate the economic outlook [17].

Our next guest says politicizing the Fed puts the F FOMC in a no-win situation for his insight on the Trump pal relationship. Let's bring in Roger Ferguson, former Fed vice chairman as well as a CNBC contributor. Uh Roger, one of the things that and it's good to see you. One of the things we've talked about is that the more you exert pressure on the Fed and J Pal uh to do something you want, it puts them in a position where it's less likely might make it make it less likely that they would do it even if you ...

I am curious about this idea of there not being any damage. I mean, even if Jay Powell isn't removed prior to his term, the idea that we've planted the seed, or at least the White House has planted the seed, that somehow he's incompetent, somehow that his policy choices have somehow been a mistake, and that we're going to right that not necessarily through data, but simply by picking somebody that we think is ideologically aligned with the president's view. Does that not in itself itself change the expectat ...