Core Viewpoint - Goldman Sachs predicts that gold prices could reach $5,000 due to concerns over President Trump's attempts to undermine the Federal Reserve's independence, with gold already having increased by 35% this year to over $3,500 per troy ounce, making it one of the best-performing assets globally [1][2]. Group 1: Economic Implications - A scenario where the Federal Reserve's independence is compromised could lead to higher inflation, decreased stock and long-dated bond prices, and a decline in the dollar's status as a reserve currency [2]. - The ongoing conflict between Trump and Fed Chair Jerome Powell over interest rates and the Federal Reserve's $2.5 billion headquarters has heightened market concerns [4][12]. Group 2: Market Trends - Gold is viewed as a reliable store of value that does not depend on institutional trust, contrasting with the volatility of stocks and bonds [4]. - The demand for gold has surged as investors seek resilient portfolio options, with foreign central banks now holding more gold than U.S. Treasuries [8]. Group 3: Company Performance - Despite the political tensions, Goldman Sachs' stock price has increased by over 50% in the past year, trading at $740.73 [6].

Adriana Cougler Myin addressed concerns about Fed independence following pressure from the president to lower interest rates. >> I couldn't be more in agreement that independence of the central bank is of paramount importance for the economy, for financial markets, for the long run stewardship of of of the country. Um all of those are are are completely I'm in in complete accord with.Um look, the the president nominated me because I have policy views uh that uh I suppose that he liked. My next guest says My ...

Since you describe how you'll be informed by your political biases, I think the American people have a right to understand just how independent you are or are not. So, let's measure that a little bit. Dr.. Myron, let's start with an easy question to show that you have some independence from the president. Easy yes or no. Did Donald Trump lose the 2020 presidential election.Um, Joe Biden was certified by Congress as the president of the United States, right. So, did Donald Trump lose that election. Um, as I ...

As for the broader market, uh, Dow settled into the red early this morning. Bob Doll is with us. Crossmart global CEO and CIO.Bob, it's good to have you. Thanks for joining us in advance of the number tomorrow. We know this is I mean, we always say the jobs number is one of the most important ever, but this could actually determine the the trajectory of rates in the medium term, wouldn't you say.Totally agree. You guys just covered the job situation very well. Look, the Jackson Hole speech was a pivot.it wa ...

Fed Independence Concerns - The Senate is concerned about compromising the Fed's independence, potentially hindering confirmation hearings [1] - President Trump's efforts to influence monetary policy are unprecedented and should be taken seriously, though markets appear comfortable [2][3][4] - Actions that are unprecedented are already being observed, potentially undercutting the Fed's independence [6] Potential Challenges to Fed Governors - Questions arise regarding the grounds for dismissing a Fed governor, particularly concerning actions unrelated to job performance [7][8] - If Governor Lisa Cook were found guilty of mortgage fraud, her position on the Fed would be untenable, regardless of the president's authority to remove her [7][8][9] Interpretation of Fed Independence - Fed independence does not mean the Fed can act without constraints; it must follow Congress's objectives of maximum sustainable employment and price stability [10][11] - Fed independence allows the central bank to conduct monetary policy free from political pressure to achieve its objectives, leading to better economic outcomes [12][13] - Compromising central bank independence can erode credibility, raising concerns about whether rate cuts are politically motivated [12] FOMC Composition - The reappointment of regional presidents could be influenced, requiring Governors Waller and Bowman to agree [4] - Even with four Trump appointees on the board, they might not all agree to alter the Federal Open Market Committee (FOMC) composition by not reappointing presidents [5]

Fed Independence & Monetary Policy - Wall Street strategists are increasingly concerned about the Fed's independence as President Trump seeks to influence the central bank [1] - JPMorgan analysts note growing market concerns over Fed independence due to signs of a "Fed inflation trade" [1] - Goldman Sachs analysts also highlight increasing worries about the Fed's credibility [1] - Morgan Stanley suggests the Fed and Treasury are working more closely together due to high debt levels, a trend observed across several presidential terms [3][4] - The Fed may feel obligated to help the government with funding, potentially leading to running the economy "hot" to tackle the deficit [5][6][8] - Maintaining lower back-end rates is crucial, and the Treasury and Fed may intervene to prevent yields from rising back towards 5% [10] Economic Outlook & Market Strategy - Morgan Stanley believes the market was previously priced for a recession, which troughed in April, and is now in a rolling recovery [11][12] - The interest rate-sensitive sectors, like housing, are expected to be the next to recover, contingent on lower borrowing costs [13] - A more dovish Fed is anticipated over the next 6-12 months, contributing to a bullish outlook for equities [13][14] - The current administration is viewed as implementing pro-growth policies, potentially leading to a boom in CapEx and earnings next year [15][16] - Lower interest rates are seen as the missing piece for a full recovery [17] - While there might be short-term corrective activity or a "sell the news" reaction to the first Fed cut, dips should be viewed as buying opportunities, with a positive equity outlook for the next 6-12 months [19]

All right, welcome back to the exchange. We've got breaking news out of Washington DC. Steve Leeman has that story.Steve, Dom, thanks. We have the opening statement for Steven Meyer. He is the candidate for a Federal Reserve job uh that is open right now.And he is going to say that independence of monetary policy is critical for its success. He pledges or he says he intends to preserve the independence of the Fed. That is a obviously a question when it comes to uh appointees of President Trump to the Federa ...

The president has broken a decades-long norm that Fed independence is sacrosanct. A collapse of faith could cause problems across markets https://t.co/L5Mw8qQhTK ...

And now let's bring in Muhammad Ali and he's Alan's chief economic adviser. It's good to have you back. Thanks for being on.Thank you, Scott. So we we keep discussing this in the context of Fed independence being at risk. At what point do you personally say, you know what, that was it.It is no longer independent because of what just happened. What is that moment. So, I don't think we're there yet, but we're getting closer to it.And what worries me, Scott, is as complex as what Aean just told us, and his phr ...

Monetary Policy & Inflation - The market expects the Fed to cut rates by 25 basis points next month, with an 88% probability [5][6] - The Fed's dual mandate of full employment and price stability is in focus, particularly the conflict between a weakening labor market and persistent inflation around 2.9% [4][11][12] - Inflation is stuck slightly above the target, and it's uncertain whether it will decrease soon [9] - The pace of rate cuts is crucial; a slow and steady approach is favored, aligning with a softening labor market while respecting the inflation backdrop [8][9][10] - The market is closely watching break-even inflation rates for signs of unease, but the bond market is largely holding together [16] Labor Market - The labor market is showing clear signs of deceleration, and the Fed is concerned about it losing momentum [3][8] - The labor report next week is crucial in determining the Fed's next steps after the initial 25 basis point cut [4][5][6] - It's important to determine if the labor market slowdown is due to structural issues (AI, immigration) or cyclical factors [5] Fed Independence - The market is not seriously pricing in a loss of Fed independence, despite recent political drama [22] - Institutional guardrails are believed to protect Fed independence, which is crucial for market confidence and controlling long-end rates [21][23][24] - Maintaining Fed credibility is essential, especially with pressure to ease rates amid persistent inflation [15]