Gary Stern, just just on the the drama surrounding the governors and the personnel, I I wonder what why how you think that it'll be important ultimately for for where Fed policy goes. Well, well, potentially it'll be quite important because it's uh essential that the integrity of the Fed policym process be sustained and if opportunities arrive strengthened. So obviously uh criticisms well criticisms of a sitting Fed governor who they're trying to fire is clearly a risk. Uh appointing somebody who is only go ...

Gary Stern, just just on the the drama surrounding the governors and the personnel, I I wonder what why how you think that it'll be important ultimately for for where Fed policy goes. Well, well, potentially it'll be quite important because it's uh essential that the integrity of the Fed policym process be sustained and if opportunities arrive strengthened. So obviously uh criticisms well criticisms of a sitting Fed governor who they're trying to fire is clearly a risk. Uh appointing somebody who is only go ...

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **Global Macro Outlook**, focusing on **US Rates**, **International Rates**, **Commodities**, **Currencies**, and **Emerging Markets** [3][4][8]. Core Insights and Arguments US Rates - Risks to the front end of the yield curve are biased lower due to labor market weakness, while concerns about Fed independence are pushing long-end rates higher [3][15]. - The first Fed cut is projected for **September 2025**, with expectations of **four sequential cuts**, bringing the funds rate target range to **3.25-3.5%** by **1Q26** [12][11]. - Anticipated **2-year Treasury yields** are expected to reach **3.50%** and **10-year yields** to **4.20%** by the end of **2025** [12][11]. International Rates - Developed market (DM) curves have steepened, particularly in the US, amid renewed focus on the long end of the curve [4][36]. - The European policy easing is losing momentum, impacting the overall yield curve dynamics [36]. Commodities - The oil market is expected to face a significant surplus, with price forecasts remaining unchanged for now due to uncertainties surrounding China's stock build [8][88]. - The European natural gas market is entering winter with historically low storage levels, leading to a bullish stance for **4Q25** and a price target of **42 EUR/MWh** [8][93]. - Copper prices are anticipated to face bearish pressure, potentially dropping to **$9,000/mt** due to unwinding demand from the US and China [8]. Currencies - The US dollar has not weakened despite recent yield curve steepening, attributed to domestic growth factors [56][58]. - Concerns regarding Fed independence and fiscal excesses are influencing the dollar's performance, with expectations of a bearish outlook [58][63]. - Fiscal policy is expected to be a key differentiator for FX, with the hypothesis that fiscal easing supports currencies in low-debt countries [63][59]. Emerging Markets - The resilience of global growth and downside risks in the US are supporting emerging market (EM) local markets [8]. - A recommendation to stay overweight (OW) in EM FX and local rates, while maintaining a market weight (MW) in EM corporates and underweight (UW) in EM sovereigns [8]. Additional Important Insights - The US Treasury is well-funded through **FY25**, but a significant funding gap is expected to emerge in **FY26**, prompting coupon auction size increases starting in **May 2026** [19][22]. - The passage of the **OBBBA** is projected to lead to a surge in T-bill issuance, with an estimated **$529 billion** of net T-bill issuance expected in the current quarter [25][23]. - Demand from foreign investors remains weak, with expectations of a shift towards more price-insensitive demand in the Treasury market [29][31]. This summary encapsulates the critical insights and projections discussed during the conference call, providing a comprehensive overview of the current macroeconomic landscape and its implications for various markets.

Core Viewpoint - The discussion emphasizes the importance of Federal Reserve independence from political influence, particularly from President Trump, while acknowledging the need for accountability in monetary policy [1][2][10]. Group 1: Federal Reserve Independence - The Federal Reserve's independence is crucial, and the individuals being considered for leadership roles understand this importance [1][2][8]. - Historical examples of dictators who harmed their economies by controlling central banks highlight the risks of political interference [9][10]. - Critics of Trump misinterpret his comments on monetary policy as a desire to undermine Fed independence, while many appointed individuals assert their commitment to maintaining that independence [10][11]. Group 2: Monetary Policy Critique - The op-ed by Scott Besson compares the Fed's monetary policy to dangerous experiments during the COVID pandemic, suggesting that the Fed has taken on too many functions and is failing at its core responsibilities [4][7]. - The prolonged period of low interest rates and aggressive money printing since the 2008 crisis is seen as unsustainable and potentially harmful to the economy [5][6]. - Concerns are raised about the devaluation of the dollar due to excessive money printing, which could undermine its status as the reserve currency [6]. Group 3: Government and Market Interaction - The Fed has been criticized for acting as a bailout mechanism for reckless financial behavior, indicating a pattern of intervention in the markets [13][14]. - The discussion suggests that government involvement in lending practices, particularly in the housing market, has contributed to economic instability [16][17]. - There is a call for reducing government interference in financial markets to allow for a more free-market approach [18].

Core Insights - The Federal Reserve is currently in the spotlight due to recent headlines regarding potential rate cuts and changes in its governance structure [2][10] - The Federal Open Market Committee (FOMC) is facing scrutiny over its decision-making process amid discussions of President Trump's influence on Fed nominations [3][10] FOMC Structure and Dynamics - The FOMC consists of seven Fed governors and five regional bank presidents, with the New York Fed president being a permanent voting member [5] - Recent changes include the resignation of Adriana Kugler and the nomination of Stephen Miran, which may allow him to participate in the upcoming FOMC meeting [4] - The FOMC has historically preferred unified decision outcomes, despite recent dissent from governors Waller and Bowman [6][10] Political Influence and Future Implications - There is speculation about President Trump potentially having a majority of his nominees on the Fed Board, which is not unprecedented in history [7][10] - Seven out of eleven candidates for the Fed chair position have experience on the FOMC, highlighting the importance of their roles in monetary policy [8] - Concerns regarding Fed independence could impact Treasury yields, although current market responses have been muted [9][10]

Economic Outlook - The economy is not in recession, and the expected easing from the Fed is likely to support market sentiment in the coming months, limiting equity market downside [3][12] - A strong earnings backdrop and positive forward earnings guidance from market leaders contribute to a constructive market setup for the next six months [2][3] Federal Reserve and Market Dynamics - The upcoming resumption of the Fed's easing cycle is a key focus, with expectations of a potential rate cut driven by weakness in the labor market [1][2] - Concerns about the independence of the Fed, particularly in light of political pressures, could impact market reactions, especially in the long end of the yield curve [5][6] Market Concentration and Valuation - The concentration of a few leading companies in the S&P 500, particularly the "MAG 7," is not viewed as a problem due to strong earnings supporting their valuations [7][8] - The artificial intelligence theme driving market leaders is seen as a less interest rate-sensitive factor, potentially shielding the market from disruptions related to easing expectations [8][9] Labor Market and Consumer Impact - Recent jobless claims have shown a slight increase, indicating potential weakness in the labor market, which could affect consumer spending [9][10] - A significant deterioration in the labor market is necessary to confirm a sustained easing cycle, with current inflation risks still present [11][12] Sector Analysis - Financials are identified as a potential beneficiary of expected rate cuts, particularly if a bull steepener occurs in the yield curve [14][15] - The financial sector may benefit from a more favorable net interest margin environment and potential financial deregulation in the coming months [15]

President Donald Trump is reshaping the US government from the inside out, and even the Federal Reserve is a target. Jerome. Too late. I call him too late Powell.I think he's terrible. Some very. Strong words coming from the president.Termination cannot come fast enough. People can say whatever they want. That's fine.This is. Something. Different.And I. Worry about it. The threats to Fed independence that we're seeing right now are real and they're significant.They're under a white hot political spotlight r ...

Fed Independence & Concerns - Fed independence, though seemingly a niche concern, has broad implications for average citizens [1] - A subservient central bank should worry every American [1] Source - Source: @WSJopinion [1]

Core Points - The Federal Open Market Committee is set to vote on lowering the Federal Reserve's key interest rate next Tuesday, with uncertainty surrounding the committee's composition [2][8] - Fed Governor Lisa Cook, who was fired by President Trump, has been reinstated by a court ruling, allowing her to continue her role while her case is ongoing [3] - President Trump is attempting to fill a vacancy on the Fed's board created by Adriana Kugler's resignation, with Stephen Miran nominated to replace her [4] Pressure for a Rate Cut - The control of the 12-person committee that sets the fed funds rate is at stake, which influences borrowing costs across various loans [5] - High interest rates have been criticized by President Trump, who argues they hinder economic growth and increase government interest payments on national debt [6] - Concerns have arisen among economists that the Fed may lower interest rates due to presidential pressure rather than economic necessity, raising questions about the Fed's independence [7]

Meanwhile, a new op-ed in the Wall Street Journal out today. Our next guest saying the assault on the Fed's independence should concern everyone. Former Federal Reserve vice chair and Princeton professor Alan Blinder joins us now to discuss his piece as well as this morning's inflation print.So, I know we've had you on before, Alan, and and you and you've been worried about what the president's doing with Lisa Cook and sort of jaw boning around Fed Chair Powell, but is there any real evidence that the Fed i ...