Yahoo Finance

Great to have you on here. I just want to get a sense of the conversations you've been having over the last 24 hours here plus. Are your clients asking you about whether or not the president can control the head of the Federal Reserve, or are they still focused on the broader tariff policy uncertainty?

You know, it's interesting, the Federal Reserve question has been an issue of conversation for me and my clients for almost a year and a half, two years before Trump was even elected president. This is something the street is inordinately focused on. There's obviously going to eventually be turnover starting in a couple months at the Fed. There's questions about who might be going, who's replacing him, is it Scott Beason, is it Kevin Warsh, who comes next? Um, so that's definitely a very popular topic of conversation, and it's kind of a constant rebalancing of investors who are just trying to find some sort of foothold amongst the tariff uncertainty that is looking like it's going to be with us for months, if not years now.

If we did see Fed Chair J. Powell ousted. And and ultimately let's remember, just the kind of baseline of this. He is in this role or his term continues to move through mid 2026. Uh, if he was ousted he has actually legal protections as well. So it would have to be for whatever miraculous cause gets kind of trumped up by the administration pun fully intended. So all those things considered here. How does that also impact what the markets have become to and come to known for decades as the independence of the Fed. How does that throw that in jeopardy?

Well, the independence of the Fed is absolutely critical. I mean, I was a Senate staffer when we were taking votes on things like auditing the Fed, which a lot of folks don't even want. You need to have that independent Fed when there is so much power resting with one president who can change his mind at a day's or an hour's notice. That kind of uncertainty is, you know, cataclysmic for markets, and that's what you've been seeing for the last couple of weeks. So what you really need is sort of a comfort level that this president will not upend norms and fire the Treasure the Federal Reserve Chairman for, you know, reasons that aren't exactly by the letter of the law, which is subject to interpretation. And right now nobody has that confidence. Moreover, we don't have the leadership in the Republican conference on the House and the Senate side, and it has to be Republicans because they're in the majority and minority members, the Democrats, they don't have this power. You have to know that there's some sort of leash on the president, and there is not right now. And I would say you know, even now that we've got a new Senate majority leader in John Thune and not the old hand of Mitch McConnell, is a little bit unsettling as well, because you don't know how far Senator Thune is willing to go to rein in the president on this. You can do things like stop nominations processes. Um, stop forward progress on the reconciliation bill. There are things that the majority party in Congress can do to put a tether on the president, and they're not doing that right now. So that removes just another leash factor that we would otherwise see on any sitting president.

So Henrietta, if a client asks, "Is this something that could likely happen?" what do you say?

I say I don't think so. I wouldn't expect it and but that's mostly because the market will send such a disastrous message. Now, I think the market has made that really clear, and I think that's positive and constructive. We did see the president react as the bond markets tanked a few weeks back during the tariff tumult. So there is some sort of leash, whether that's coming from Treasury Secretary Pesin putting, you know, some sort of restriction on the president's impulses here. So I'm optimistic that the market will send that message and has sent that message clearly. But the president is plainly jawboning about it, and that in and of itself is disruptive.