The Campaign to Fire Jerome Powell; Joe Biden, Clueless at the Carlyle Hotel
Author: Greg Valliere
June 19, 2019
JEROME POWELL, ON THIN ICE: If the Fed doesn’t cut interest rates today — the central bankers probably will not — we would anticipate a furious reaction from President Trump, who clearly loathes Powell, who he appointed. Trump wants two things: a weaker dollar, which allegedly could reduce the U.S. trade imbalance, and interest rate reductions, which may come later rather than sooner.
TRUMP RANTED YESTERDAY about comments from Mario Draghi, the European Central Bank Chairman, who indicated that more monetary stimulus is possible in Europe. Trump wants more stimulus in the U.S., and we fully agree with a Bloomberg piece yesterday that indicated he wants to fire Powell, or demote him — removing him as Chairman, making him a mere governor.
NO VOTE OF CONFIDENCE: Asked whether he wanted to oust Powell, Trump said yesterday “let’s see what he does,” apparently referring to this afternoon’s FOMC decision and press conferece. If there’s no rate cut — just a hint that one might come if necessary later this summer — we think Trump will immediately intensify his public relations war against the Fed Chairman. This likelihood, of course, could make the Fed less inclined likely to cut rates.
WE PREDICTED EARLIER THIS SPRING that Trump will attempt to fire Powell this coming winter, but it could come sooner than that. As we noted, the law is vague on whether a president has the authority to fire agency heads, but Trump could cite malfeasance or other transgressions; the fallback would be to simply demote Powell.
TRUMP HAS STATED that the single greatest threat to his re-election is Powell, and we think the harassment will become so intense that it could force the Chairman to step down, despite Powell’s assertion that he would never resign. The ultimate irony: Trump had the most dovish Fed Chair in our lifetimes, an Obama appointee, and he fired her.
* * * * *
JOE BIDEN, TONE DEAF: The 76-year-old former vice president spoke at a fundraiser on Tuesday night at the Carlyle Hotel in NYC, where the lowest priced room costs a mere $926 per night, including taxes. Ad-libbing, which is dangerous for Biden, he waxed nostalgic about the the U.S. Senate decades ago. Biden cited the “civility” shown to him by James Eastland of Mississippi and Herman Talmidge of Georgia. Both were opposed to integration; Eastland in particular was considered a virulent racist.
BUT THE SENATE WAS ABLE TO GET THINGS DONE, and he learned to work with others, Biden said, according to a summary in this morning’s New York Times that is certain to rekindle criticism that he’s clueless. Eastland, he said, “never called me ‘boy,’ he called me ‘son,’ ” said Biden who, of course, is white. He’s the shakiest front-runner in recent memory, just one major gaffe away from imploding. Biden will clarify his remarks at the Carlyle, but his strong support among African Americans is likely to slip.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2020 AGF Management Limited. All rights reserved.