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Chair Powell made three points on succession. He will stay on as chair until his successor is confirmed. He won’t leave the board until the DoJ investigation goes away. He won’t commit to leaving even after that.
The third point is somewhat controversial. Especially when there is little evidence that attacks on the Fed have damaged the perceived independence of the Federal Reserve.
The Warsh nomination was well received. Market based inflation expectations are well anchored. Foreign ownership of US assets stable. Powell staying on beyond his term as chair wasn’t a factor in any of that.
In a sensible effort to provide continuity it risks crossing over into inviting controversy. Not committing to leaving conveys that Powell appears to have less faith in Fed independence in his absence than markets do. That’s either misguided or highly concerning because that view certainly isn’t well priced.
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Dear Tim,
Please set the default commentary on Apple TV to Sky… Pressure the FIA to fix the engine regs… And if you have any friends at @HP ask if they can stop butchering the Ferrari livery with its branding. Happy to revert back with suggestions for the race calendar.
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.@RenMacLLC nailing it.
The ‘sell America’ headlines struggle to stand up to pretty basic scrutiny.
Price action is also consistent with an improvement in global risk appetite with an AI twist.
See the Aussie (strongest G10 FX), copper (record highs), Kospi up 22% YTD) etc.
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Thought the takes last week on the bond market were also a bit bizarre.
A 6bps move on the long-end of the treasury curve following a 30bps move in Japan?!
Story wasn’t that treasuries were sold. Story is that they didn’t sell off more despite serious convulsions in JGBs.
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Ford: A $40 billion company complaining about tariffs.
versus
Microsoft: A $4 trillion company absolutely crushing estimates.
As @RickRieder said this week
“Markets are not ignoring risk; they are pricing a system built to absorb it”
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Tomorrow 8am @BloombergTV
“I believe it makes sense to cut the FOMC’s policy rate by 25 basis points two weeks from now”
Governor Waller
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Jonathan Ferro retweeted
Good morning, good morning POTUS. Only place to be on jobs day is with @FerroTV @bsurveillance.
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Is US market exceptionalism dead?
Nope.
When the whole world is on the menu. CEOs are still choosing America.
And when they do… Investors nod in approval and the stock rallies.
Will the last firm to leave the London market please turn out the lights?
*ASTRAZENECA CEO WANTS TO MOVE LISTING TO US: THE TIMES
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Jonathan Ferro retweeted
On trade talks with China, @SteveMiran tells @FerroTV and me—“I would be surprised if tariff rates are where they are now, you know, within a few weeks from now.”
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It takes seconds to price in a shock to the cycle. It takes much longer to internalise potential shocks to the system.
Feels like Wall St is breaking away from myopic chats about weather and pondering an unfamiliar investment solar system.
This aint your average growth scare.
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Jonathan Ferro retweeted
Whenever I hear about “The Dow” , I think about this. It’s like giving a tornado warning to an uninhabited area. Sounds awful yet nobody is there. $UNH is down 20% right now.
UnitedHealth is 9% of the index
Hardly anybody 'owns' the dow
Why give a weather report for a town nobody lives in?
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UnitedHealth is 9% of the index
Hardly anybody 'owns' the dow
Why give a weather report for a town nobody lives in?
@BloombergTV @FerroTV Jonathan Ferro reported just now that the markets are "up across the board" which is strictly not true. The DJ30 (which for some reason you never report) is down on the day.
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Ditto!!
@FerroTV loved the opening, Trump wants to watch Masters next 4 days puts new perspective. Go Rory!!
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Still all in the hands of one man. But based on these comments the off-ramp is being pieced together if he eventually wants to take it.
The administration doubling down on China and leaving the door open for negotiation with everyone else.
China has chosen to isolate itself by retaliating and doubling down on previous negative behavior.
Over 50 countries have responded both openly and positively to @POTUS @realDonaldTrump’s historic action to create a fairer, more prosperous system of global trade. We look forward to meaningful negotiations with them over the coming weeks.
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Huge difference between a shock to the cycle vs a shock to the system.
Is this the start of negotiations or are these the new rules of the game?
The uncertainty is leading to an immediate repricing of the cycle. It will take much longer to fully internalize a shock to the system.
@elerianm will join us to kickoff special programing at 5PM ET @BloombergTV
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