LyrArc Article Gist
US president Trump appointed Powell in 2016 in his first year in office. DJT's advisers have told him that it is important that the Fed have autonomy, and that the Fed was structured from inception for having the independent judgement for what is best for the economy. At times DJT has wanted the Fed in his first term to at least consult with the president.

In this context remember that Powell as chair of the Fed will be till May 2026. And Powell will remain as Governor on the Fed Board till Jan 2028. Of the current 7 governors the only other terms of a Fed Governor that expires early is Adriana Kugler in 2026.

DJT tariff and tax policies could increase inflation and growth which will require the Fed to recalibrate its views on cutting rates. 

LyrArc Article Gist
With continued job growth the US Fed is planning to continue its sequential interest rate increases. The Fed raised interest rates 0.75% at each of the last 3 Fed meetings and a fourth 0.75 rate increase is expected when it meets on November 1-2, 2022. This is the most rapid rate of increases since the 1980's and it is designed to bring inflation under control.

LyrArc Article Gist
ECB cuts rates to 2.0% from 2.25% June 2025. This is the eighth such cut in a year. Inflation in Eurozone is 2.0%.

LyrArc Article Gist
This WSJ editorial says about the US Fed guaranteeing the 90% of uninsured deposits at Silicon Valley Bank to prevent systemic risk, that the 250,000 limit was set by Congress to protect average Americans not venture investors in Silicon Valley. Venture capital investors and startups in Silicon Valley put large amounts into the bank. It says the San Francisco Fed regulates Silicon Valley Bank and failed to perform its regulatory function. And adds that the idea of elevating San Francisco Fed president Mary Daly to the Federal Reserve Board of Governors now seems preposterous. Fed, Treasury, and the bankers all have to take the blame. The Guardian reports that the CEO of SVB lobbied to reduce the regulatory impact on his bank. By choosing higher returns from long term Treasury bonds and expanding too quickly this created the conditions for the collapse, and then rescue by the Fed and Treasury in the all to familiar pattern since 2008.

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Spotlight on Bernanke Fed and crisis management. What is different about this crisis and what is the Fed doing about it, and the role of Treasury under Paulson, to restore investor and markets confidence while continuing good macro policies such as the focus on inflation and longer term financial goals.

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The different opinions of Fed Governors of Kansas City and Boston show the divergence of opinion that is being heard by the Fed chairman Jay Powell as he plans smaller interest rate increases in 2023. Susan Collins of the Boston Fed is concerned about the effects on unemployment. Kansas City Fed's Esther George is concerned about the Fed not staying in the fight against inflation long enough. Powell says "We wouldn't ... try to crash the economy.. and then cleanup afterwards. I wouldn't take that approach at all." The difficult aspect of the interest rate increases is that it takes about 1 year to know the full effects of rate increase.

LyrArc Article Gist
According to Fidelity Investments about 27% of retirement age investors 55-59 have stock allocations at least 10% higher than what is normal for this age group.

LyrArc Article Gist
The Director General of the National Council of Applied Economic Research in India, Suman Bery, says that of all the countries in the G-20, India is least dependent on export led growth. This is why India gains from a reactivation of the American economy. This view was expressed by Prime Minister Manmohan Singh during President Obama's visit to India. Singh supported the Fed's move to purchase $600 billion in Treasury securities.