News — president

Lessons and Reactions From The Federal Reserve’s June Policy Statement

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By John McDonald  On June 19, 2019, the United States Federal Reserve Board of Governors released a policy statement based on the recent meeting of the Federal Open Market Committee. Market reaction was swift and substantial. Nearly immediately, the yield on the 10-year Treasury Note fell below 2% since November of 2016. CNBC describes 2% as “a key psychological level”, though such language is, at best, nebulous. Regardless of the “psychological significance” of the fact that the 10-year note dropped below 2%, substantial downside moves in that key interest rate can absolutely have a serious impact on everyday financial issues...

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MarketWatch Claims Investors Are More Bearish Than Anytime Since 2008… But Are They?

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By John McDonald Both the S&P 500 and the Dow Jones Industrial Average have been booming upwards with hardly a pause since the day after Donald Trump won the Presidency of the United States in November of 2016. Having bolted upwards by over 40% from then to today’s close at 3,003.67, the S&P 500 appears strong and headed higher still. Yet the “experts” at MarketWatch tell us that investors have not been this bearish since 2008. Something seems a bit “off”. One wonders: Who are the “investors” to whom MarketWatch refers? Are these “investors” actually representative of the collective psyche...

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Presidential Criticism of European Central Bank President Raises Fear of Currency Wars

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By John McDonald Despite suggesting earlier this summer that European Central Bank President Mario Draghi would be better in charge of the Federal Reserve than sitting chairman, Jerome Powell, President Trump has recently criticized Draghi for aggressive monetary tightening in Europe.  Draghi had signaled that the ECB could lower interest rates as early as July while speaking at a central-banking forum in Portugal. The euro responded by plummeting in value while global equity markets reacted positively to the news that the ECB might restart its bond-buying program to support the Eurozone economy. President Trump’s issue with Draghi’s policies came in...

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Fed Skeptical of Presidential Threats to Remove Chairman Jerome Powell

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By John McDonald President Trump is not shy about voicing his displeasure when other federal entities appear to fall short of supporting his goals for the U.S. economy. One individual who has routinely received public presidential criticism for fiscal policy is, not surprisingly, Federal Reserve Chairman Jerome Powell.  In fact, the two have held such divergent opinions in some instances that the White House reviewed the legality of removing Powell from his position.  This, also not surprisingly, set off a firestorm. While the White House legal team allegedly established a possible blueprint for demoting Powell instead of removing him, the...

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President Explored Removing Fed Chair in Early 2019

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By John McDonald Jerome Powell has served as the chair of the Federal Reserve since February 2018, and President Trump celebrated the first anniversary of Powell’s appointment to the position by exploring options for having him removed from the office.  According to “people familiar with the matter” who serve as sources for Bloomberg, the White House counsel’s office examined the legality of stripping Powell of his chairmanship.  The move would have left him a Fed governor, but no longer the chair of the Fed. Once that was done, Powell could conceivably have been replaced with another sitting Fed governor. Ultimately,...

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