Investing
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Earlier this month, Fed governor Adriana Kugler announced her resignation and President Trump nominated Council of Economic Advisers head Stephen Miran to take her seat.
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Pressure is now mounting on a second Fed governor, Lisa Cook, to resign in favor of a governor more inclined to lower interest rates.
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President Trump is pressuring a second member of the Federal Reserve Board of Governors to resign, and it may be making investors nervous.
The Wall Street Journal reports this morning that Federal Housing Finance Agency Director Bill Pulte is asking the Department of Justice to investigate allegedly fraudulent mortgage applications made by Federal Reserve Governor Lisa Cook in 2021, a year before she took office. President Trump says Cook “must resign, now!!!”
If he gets his way, a second vote against lowering interest rates at the Fed may vanish. Earlier this month, Fed governor Adriana Kugler (another historic “no” vote on lowering interest rates) resigned, and the President has already nominated his head of the Council of Economic Advisers, Stephen Miran, to fill that vacancy.
The way things are going, the Fed Chair Jerome Powell may be able to keep his job — and the Federal Open Market Committee will still vote to lower interest rates. You’d think investors would applaud the prospect (because lower interest rates are generally considered “good” for the stock market).
Instead, in premarket trading, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is down 0.4%.
Tariffs news
Tariffs could be part of the problem. The way Wall Street thinking goes, lowering interest rates is supposed to boost the economy to offset any slowdown caused by President Trump’s “reciprocal” tariffs against the world.
In recent weeks, the President has announced a series of trade deals to lower tariffs from the much higher rates earlier threatened, albeit actual changes in the announced rates have been slow in coming. This morning, CNBC reports new details on those negotiations, including the revelation that European pharmaceutical exports to the U.S. will be capped at a 15% tariff rate.
Tariffs on semiconductors and on European lumber, and potentially automobiles as well, will also be capped at 15%, and any certain other goods,, including airplane parts and airplanes, may receive even lower most-favored nation tariff rates.
As with the prospect for lower interest rates, you’d expect these developments to be bullish for the stock market. And yet, it’s still going down…
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