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Trump vs The Fed: How Political Pressure on Jerome Powell Could Shake the Markets · Earn Your Leisure

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  Speaker 1: This episode is brought to you by P and C Bank.
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  Speaker 1: the PNC Financial Service Group, Inc. P and C Bank
• 0:39
  Speaker 1: National Association Member FDIC.
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  Speaker 2: Donald Trump in his Justice Department, they are investigating the
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  Speaker 2: Federal Reserve and the Federal Reserve Chief Chair Jerome pal
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  Speaker 2: And that's something that is pretty unprecedented, at least that's
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  Speaker 2: what Jerome.
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  Speaker 3: Had to say about it.
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  Speaker 2: He said that, paraphrasing, he said that this is this
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  Speaker 2: is because the refusal of the Fed dropping interest rates
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  Speaker 2: and the refusal of the Fed, you know, bowing to
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  Speaker 2: Donald Trump's demand.
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  Speaker 1: Right, the threat of criminal charges is a consequence of
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  Speaker 1: the Federal Reserve setting interest rates based on our best
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  Speaker 1: assessment of what would serve the public, rather than following
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  Speaker 1: the preference of the president.
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  Speaker 3: This is where we're at. This is where we're at. Yeah,
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  Speaker 3: So long story short.
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  Speaker 2: He said that on Friday they they served them with
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  Speaker 2: the investigation notification and he said that he will not
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  Speaker 2: back down, and that is it's dangerous waters when the
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  Speaker 2: FED loses its autonomy and becomes political, because the Federal
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  Speaker 2: Reserve is not designed to become political. It's not designed
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  Speaker 2: to answer to politicians, even the president. But Donald Trump
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  Speaker 2: is not a traditional politician or a traditional president by
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  Speaker 2: any means. And even at the last FED share she
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  Speaker 2: spoke about this and she said that it sais a
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  Speaker 2: very dangerous president. It's extremely bad, extremely bad for the
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  Speaker 2: market and something that you know needs to really be monitored. So,
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  Speaker 2: what are the thoughts on this billet, the impact the
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  Speaker 2: stock market, the greater impact for the economy. What's the
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  Speaker 2: overall thoughts on the president putting almost criminal charges. It
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  Speaker 2: looks like on one of the most powerful people in
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  Speaker 2: the world.
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  Speaker 1: We got to say alleged because he said he had
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  Speaker 1: no idea that it happened.
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  Speaker 4: Wow, not surprised, and Legal called him Brighten earlier this morning,
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  Speaker 4: Well when this first happened, and Rashat you pointed this
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  Speaker 4: out when they had that meeting up the construction site.
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  Speaker 4: He's going to be vindictive because he doesn't need anyone
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  Speaker 4: to uncover how tumultuous our economic landscape is. Like I
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  Speaker 4: was talking about this on stock Club and we've talked
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  Speaker 4: about it on a show him privately, But how bad
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  Speaker 4: do things have to be for a country? In order
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  Speaker 4: for you to move up the GDP from one percent
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  Speaker 4: to potentially five you had to form a coup in
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  Speaker 4: Venezuela to get resources. So the way he's running this
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  Speaker 4: is like a mob boss allegedly, and any enemy combatant
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  Speaker 4: to the story is going to be punished. And it's
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  Speaker 4: the reason why this is so important because they don't
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  Speaker 4: want the election.
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  Speaker 3: To turn.
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  Speaker 4: This year and with JD. Van running, I think it's
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  Speaker 4: a terrible precedent. And also the Federal Reserve is a
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  Speaker 4: private entity, so if they begin to push back and
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  Speaker 4: higher powers that be begin to push back on him,
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  Speaker 4: I don't think it would be great for our economy.
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  Speaker 4: A mistake and opposed to fixing the core problem, being
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  Speaker 4: punitive towards the chair because he didn't do what you
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  Speaker 4: want is a grand mistake. What do you guys think?
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  Speaker 1: Yeah, I mean when we saw Duvin Knight, it was
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  Speaker 1: just like yo, it made me think about July in
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  Speaker 1: that meeting when he talked about the overspending uh and
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  Speaker 1: you know, Jerome kind of embarrassed him a little bit there.
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  Speaker 1: You know, he's a vindictive guy. He's a guy that
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  Speaker 1: doesn't forgot things, and he's gonna, you know, try his
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  Speaker 1: best to make sure that he gets his way, and
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  Speaker 1: anybody that gets in that way there's going to be
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  Speaker 1: consequences with I think it's that's a terrible precedent, right,
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  Speaker 1: even if I mean to indict the FED chair and
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  Speaker 1: subpoena him is just like it's pretty I mean, it's
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  Speaker 1: never had a war you learn on a drug warlord? Yeah,
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  Speaker 1: But what it was to say about he is the
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  Speaker 1: FED chair. He has two seats, right, he's also the
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  Speaker 1: governor of the FED. So when he leaves in May,
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  Speaker 1: you know, when his time is up, you still have
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  Speaker 1: to put some money in his place. What does it
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  Speaker 1: say about the next person that goes into that seat, right, Like,
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  Speaker 1: are you going in there with no influence, right, Or
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  Speaker 1: are you going in there because you've been hand selected
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  Speaker 1: because you know that the president's influence will be listened
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  Speaker 1: to and you will act on some of the things
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  Speaker 1: that he's asked for. Right, he's been saying that we
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  Speaker 1: need to lower rates. It's funny because we had three
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  Speaker 1: rate lowering happening during twenty twenty five.
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  Speaker 3: Right.
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  Speaker 1: That wasn't even expected, right.
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  Speaker 4: Surprisingly, Yeah, I was gonna say that.
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  Speaker 1: Coming out of twenty twenty five, it was like we
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  Speaker 1: might get two cuts, maybe one.
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  Speaker 3: We got three.
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  Speaker 1: And if you look at the minutes from all those meetings,
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  Speaker 1: the person who was fighting for those rate cuts was
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  Speaker 1: Jarron Powell. He was a guy that was actually fighting
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  Speaker 1: inside those means to make sure that we had three
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  Speaker 1: rate cuts to attack them because you wanted more. It's ridiculous. Now,
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  Speaker 1: what does it say for the market. It's interesting, man,
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  Speaker 1: you think about the past week, Like you said, Venezuela,
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  Speaker 1: you're talking about institutions can't buy single homes anymore. You're
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  Speaker 1: talking about having a freeze on interest rates at ten
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  Speaker 1: percent for credit cards. All these things that are happening
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  Speaker 1: in let's say a ten day span. Typically this crash
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  Speaker 1: is a market yep, but here we are resilient still, right,
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  Speaker 1: Like we didn't see a thousand point drop or five
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  Speaker 1: hundred point drop. The Dow opened down three hundred. It
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  Speaker 1: was like, okay, there's gonna be some ramifications from an
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  Speaker 1: indictment from the FED chair. But I mean it wasn't
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  Speaker 1: something that's right, It's just it's so it's very interesting.
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  Speaker 3: Man, risk is.
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  Speaker 4: Back on and no one cares about the long term
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  Speaker 4: ramifications even with him one and more interest rates cuts.
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  Speaker 4: It reminds me of Er five with the banking and
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  Speaker 4: subprime crisis. Everyone's thinking short term. And to be very clear,
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  Speaker 4: even with this point with the FED chair, he wants
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  Speaker 4: to do what he needs to do so his legacy
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  Speaker 4: is intact. When he leaves office, he's not thinking about
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  Speaker 4: the betterment of the country at all.
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  Speaker 1: So right, I feel like that's been the consensus we've
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  Speaker 1: seen that over. I think he's going to be it'll
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  Speaker 1: be a year on the twenty first, right since he
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  Speaker 1: was sworn in as president when he's thinking about his legacy.
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  Speaker 1: From day one, he's thinking about his legacy, whether it
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  Speaker 1: was from policy, whether it was naming buildings after himself,
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  Speaker 1: it's all been about his legacy, and it's gonntinue to
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  Speaker 1: continue to be that, including the fetcher that you know
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  Speaker 1: that he'll pick.
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  Speaker 3: Well, the crazy thing is that he picked he picked
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  Speaker 3: your own power. True.
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  Speaker 4: So well, some people would say that that was a
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  Speaker 4: forced pick. That wasn't his true pick that he wanted.
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  Speaker 4: That's who he could have selected at the time, allegedly.
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  Speaker 2: I mean, but it's under his it's under his legacy.
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  Speaker 2: Gotta he got a chance to pick that. The FED
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  Speaker 2: shair he picked your own power. Okay, he don't like him,
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  Speaker 2: so he definitely wants he has who he wants to
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  Speaker 2: be the next FED chair and I think that he's
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  Speaker 2: Project twenty twenty five.
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  Speaker 3: As far as the consolidation of power.
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  Speaker 2: And one of the main things that makes the American
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  Speaker 2: quote unquote democracy different from a you know, monarchy or
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  Speaker 2: tutarian type stat is that there's different branches of government
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  Speaker 2: have different powers, and some branches actually are independent of
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  Speaker 2: the government, like the Federal Reserve, where in the traditional
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  Speaker 2: you know, kingdom, the king has pretty much a saying
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  Speaker 2: anything that happens from the military to the federal Reserve
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  Speaker 2: system to you name it. And one of the things
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  Speaker 2: is everybody who probably twenty twenty five was talking about
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  Speaker 2: the civil rights aspects, and that's important, but one of
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  Speaker 2: the main themes in Project twenty twenty five was to
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  Speaker 2: consolidate power power yep, and that's what he's doing. He
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  Speaker 2: did it with the Justice Department and now he's doing
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  Speaker 2: it with the Federal Reserve. As far as to really
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  Speaker 2: be aggressive and pretty much saying like, if you don't
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  Speaker 2: do what I'm gonna what I want you to do
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  Speaker 2: is gonna be you know, extreme consequences for that, and
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  Speaker 2: try to force force a new Federal Reserve chair in.
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  Speaker 2: It's pretty unprecedent. I think it's ever actually been happened before.
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  Speaker 2: So it's unprecedented times that we're living in. But it's
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  Speaker 2: not surprising if you really, you know, studied the playbook
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  Speaker 2: that they said they were gonna do.
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  Speaker 3: It's not a secret. We're all denied.
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  Speaker 4: Remember I remember when you first started posting it and
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  Speaker 4: everyone was like, oh, this is fake. And all of
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  Speaker 4: them are quiet, even in the Minneapolis issue. And we'll
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  Speaker 4: talk about that on Blackout, but everyone's quiet. Who said
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  Speaker 4: Project twenty twenty five was fake almost following it line
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  Speaker 4: by line.
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  Speaker 1: Yeah, I think it's either your negligent about it or
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  Speaker 1: complicit with it, right, Like it's either or Like if
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  Speaker 1: you required that means all right, well it's happening, and
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  Speaker 1: you're like, Okay, they said it would, but it's.
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  Speaker 3: It's just is it surprising? I don't. I don't.
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  Speaker 1: I don't feel like it's surprising, right, Like even from
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  Speaker 1: the world of investing, right, like when you're talking about
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  Speaker 1: lowering interest rates, Yeah, that help stocks out for sure?
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  Speaker 1: Does it help tech companies one hundred percent? But even
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  Speaker 1: you know, thinking about it's like the way that Powell
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  Speaker 1: did it was very strategic. Like he came out of
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  Speaker 1: a pandemic, right, there was all talks of recession. We
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  Speaker 1: actually went into a recession. We had a bull market,
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  Speaker 1: a bear market, we had all these things.
• 10:46
  Speaker 3: It was a soft landing.
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  Speaker 1: There was stagflation, it was inflation.
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  Speaker 3: We still managed all of that.
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  Speaker 1: Like, I feel like that the tarnishing of his legacy
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  Speaker 1: is well with with what he's trying to do.
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  Speaker 4: But I mean, the proof speaks for itself, right, you
• 11:00
  Speaker 4: can't argue with his plan. That's the job most people
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  Speaker 4: wouldn't want. I wouldn't want it. He I think he
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  Speaker 4: managed that incredibly well. Give him the disaster that was
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  Speaker 4: put on his plate and then to try and railroad
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  Speaker 4: him now because of a personal vendetta when he helped
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  Speaker 4: save you is insane.
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  Speaker 1: He actually did the thing you wanted, he just didn't
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  Speaker 1: do it. That's frequently.
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  Speaker 2: So from a stock market standpoint, like I said the
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  Speaker 2: last FED chair, she said that this is going to
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  Speaker 2: have a negative impact on the market, maybe not in
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  Speaker 2: the week, but long term.
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  Speaker 3: So is this going to be bad for the stock market?
• 11:39
  Speaker 4: As I stated last week, I think the first half
• 11:41
  Speaker 4: of the year would be great. Around the time we
• 11:43
  Speaker 4: get a lovely cover for invest Fest, get your ticks
• 11:47
  Speaker 4: to invest Fest. Around that invest Fest time, oh, we're
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  Speaker 4: going to see some turbulence and that's the best time
• 11:53
  Speaker 4: for you to be there, for me to be able
• 11:54
  Speaker 4: to guide you on what to do. But the second
• 11:57
  Speaker 4: half of the year is going to be trouble. And
• 11:59
  Speaker 4: if we're they're talking about taking Greenland, the talks of Columbia,
• 12:03
  Speaker 4: Nigeria and Cuba are picking up. The valuations of stocks
• 12:09
  Speaker 4: are erodent in some sectors. There aren't as many GDP
• 12:13
  Speaker 4: movers and even in the collaboration, we'll talk about Lily
• 12:17
  Speaker 4: and Nvidiolator, Apple and Google. Usually when companies are coming
• 12:22
  Speaker 4: together for these deep partnerships, it's to prevent from treeods
• 12:26
  Speaker 4: from happening, and they're building a moat together. So the
• 12:30
  Speaker 4: second half of the year is going to be incredibly tough.
• 12:32
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