Trump eased pressure on Kevin Warsh. The new Fed chairman gets space on interest rates. Inflation sits at four percent. The president still wants cuts.
Warsh took the job knowing Trump would demand lower rates during every conceivable economic condition. Recession? Cut rates. Boom? Cut rates. Inflation running hot? Definitely cut rates. The man has one setting and it's not subtle.
Now inflation tops four percent and Trump's advisors are giving Warsh room to breathe. They're giving him space. They're backing off. This generosity lasted approximately seventy-two hours before Trump went back to repeating his calls to cut anyway.
Imagine being Warsh. You accept the most politically poisoned job in finance. You know the president who appointed you thinks the Federal Reserve exists to juice asset prices on command like a slot machine that pays out every time he tweets. You show up thinking maybe you can maintain some independence. Then inflation hits four percent and your boss immediately goes on television demanding you make it worse.
The technical setup here is pristine. Draw a horizontal line at any level you want. Call it support. Call it resistance. Doesn't matter. Warsh will cut rates or he won't. Inflation will go up or down. Your portfolio will die either way because you're holding leveraged ETFs you don't understand while googling "what is the Fed" between TikToks.
Trump's economic advisors are giving Warsh space the way a cat gives a wounded mouse space. They're watching. They're waiting. The second he steps out of line they'll leak to three different reporters that the president is considering replacements.
Warsh gets his space until he doesn't, which should happen roughly ten minutes after the next jobs report.
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