CNN *Freaking* on Trump & Firing Fed Chair Jerome Powell [Explained]

oh firing jpow this is going to be a

good one and you're going to want to pay

attention to this one I do want to give

you a quick heads up that this morning I

gave a totally free heads up that you

want to pay attention to coin and Robin

Hood here it is I sent this to people I

texted it to you I emailed it to you I

talked about Hood going to

2981 and coin breaking 244 if we get a

bullish open on the NASDAQ that's what I

wrote in my Alpha report and look at

what happened Robin Hood traded sideways

for about the first 30 minutes and then

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CNN is freaking out that the Federal

Reserve might get destroyed by Donald

Trump in fact they say exactly that in

their article entitled the Federal

Reserve as we know it could soon be

turned on its head this was published

today and it pictures a side photo of

Drome Powell now we'll go into the

details of what they're concerned about

and how Donald Trump could fire Jerome

Powell or if he does what that could

mean for Federal Reserve Independence

but what we've got to analyze first is

is it even possible for Donald Trump to

fire Jerome Powell after we ask is it

possible then we have to ask ourselves

okay well whom and why would there be a

replacement uh so with whom would drum

get replaced and why would there be a

replacement and then we'll have to

evaluate what does CNN actually have in

terms of a concern and is there any

valid basis for this so let's start is

it possible for Donald Trump to fire

Jerome Powell well as somebody who

studies the fed and probably more than

Nick T does although I'll give respect

to Nick T he basically says we're

getting a 25 basis point cut tomorrow uh

it is worth noting that the Federal

Reserve Act does allow a president to

remove a Fed governor for cause now keep

this in mind there are seven fed

Governors one of them sits on the chair

of the Board of Governors and there are

12 more Bank presidents so in total you

usually have a total board with

Governors and presidents of about

19 uh but uh let's understand this for a

moment if a president is allowed to

remove somebody like drw Powell for

cause how is cause defined well actually

pretty dang broadly and we know anything

that's defined pretty dang broadly is

subject to Donald Trump's interpretation

and we know that Donald Trump is going

to interpret it to mean whatever the

hell he wants for cause is generally

regulated as uh some form of

inefficiency in governance neglect of

Duty or mal fence well inefficiency

frankly you can make plenty of arguments

about the inefficiencies of monetary

policy especially if the country ends up

entering into a slow lower jobs growth

environment which that alone could argue

for either a recession or replacing

drone Powell after all the Federal

Reserve has a dual mandate stable prices

and maximum employment and if employment

is going negative then you could argue

the FED is either being inefficient or

they're doing something wrong which

would be malici Mal excuse me or or just

straight up neglect quite frankly you

could just allege all three of those

fire Jerome Powell picks somebody else

and by the time it gets litigated in

courts which tend to now broadly side

with Donald Trump well let's just say

you're going to end up with a different

fed president so is it possible

absolutely now is it likely and with

whom would Donald Trump replace drum pal

well I think whether or not it's likely

depends on what kind of economy Donald

Trump inherits Nick T talked about

exactly this early earlier today on Fox

Business now I'll save you the 7-minute

video because while he basically said

we're getting a 25 BP cut tomorrow you

know quarter percentage point cut uh and

we'll get a lot of wait and see Nick T

was very reasonable to point out that

hey we don't exactly know what kind of

economy we're going to get under Donald

Trump because some of it is out of

Donald Trump's control we have

expectations about tax policy and tariff

policies and potentially inflation or

rates but that doesn't necessarily mean

that our expectations are going to align

with reality in fact frequently the

opposite happens so let's think for a

moment if Donald Trump as Nick T says

inherits a productivity boom and GDP

continues to grow well we might actually

be able to pay off our debt or reduce

our debt expenditures as a per

percentage of GDP and we could go into a

relatively positive period of economic

growth which is generally good for

everyone if however Donald Trump inh

it's a more recessionary economy which

is possible by January February when he

takes over it is entirely possible that

Jerome Powell is going to find himself

stuck between a rock and a hard place do

we cut faster do we go to 3% do we go to

2% 1% do we go to zero and we can all

anticipate that Donald Trump is going to

demand zero but not only is Donald Trump

going to demand zero he's going to

demand exactly what Rick santoli from

CNBC was freaking out about this morning

when he was interviewing a commodity

well a volatility Trader over at the uh

Commodities and Futures Trading

commission and Rick Santo's like wait

what do you think the fed's going to do

and the guy's like qwi we're going to go

back to QE that's quantitative easing

and Rick was freaking out over this he's

not a big fan of the Federal Reserves

manipulation in markets but this is not

just going to be about interest rates

coming down Donald Trump has the

potential to say look poell you're fired

unless you get rates down rapidly and

you turn the money printer back on money

printer go Burr now in order to actually

get to that kind of pressure you're

probably going to have to have problems

in markets uh some form of instability

like when stock markets are at all-time

highs I don't see Donald Trump uh

picking up the phone uh and going um uh

oh uh hey

um I need you to go to zero Po's going

to be like uh well first of all why are

you on the camera app and second of all

why now if markets are in

turmoil then it's entirely possible that

Jan Paul picks up the phone goes what

are you doing get to work here otherwise

you're

fired and it could enhance the federal

reserve's desire to actually make uh

some change happen after all drum Powell

while he says he wants to be a political

that is not influenced by politics he

also has a legacy to protect and being

the first uh D you know Federal Reserve

chairperson to get fired would look

really bad for Jerome Powell now he

might not care but he also doesn't want

a recession I truly do believe Jerome

Powell cares about quite frankly the

success of America and if they can avoid

a recession they will now they will put

us through a recession if they think

there's a risk of inflation coming back

they'll rather have a recession than

inflation but that's really a debate for

a different video

what's more important is if inflation is

down which I expect it to continue to be

and we have tumult in the market I

absolutely expect Donald Trump to

pressure Powell Powell's term does not

technically end until May of

20126 that technically means Dron Powell

has another a year and a half about 18

months of his term to

go this is actually quite interesting

because it means hm you get get fired at

any point next year unless you do Donald

Trump's bidding now with whom would

Donald Trump replace strong pow this

might mean less but it could be really

anyone you could have uh Kevin hasset uh

you remember him he used to be on TV all

the time during covid and during the

v-shaped recovery Larry cudow days he

was the former chair of the Council of

economic advisers under Trump and uh

he's really a tax policy expert he

worked a lot with the tax cut and job

act another option would be art laugher

though art laugher has kind of suggested

he doesn't want the job art laugher

would make uh Kathy Wood's like life

Kathy Wood loves Kevin art laugher

really respects him he's somebody who

was part of the Reagan Administration uh

he was a strong advocate for tax cuts

which you know a lot of people

especially Trump supporters big fan of

tax cuts I think that's probably also in

part why he got elected uh and he's a

big fan of using tax cuts to stimulate

growth could he end up working as a Fed

yes but he's indicated he doesn't really

want a life of that sort of public eye

so he might say no but who knows maybe

he'll end up being some form of advisor

or they'll just find somebody who sort

of like art laugher another opportunity

could be Lori Logan who already works at

the Federal Reserve or maybe somebody

like Kevin warsh uh this is just another

former fed Governor from the banki days

uh and uh he's he's got some critical

views on QE though so it's possible that

you don't end up getting Kevin warsh uh

and Lori Logan might be a little bit

more concerned about inflation so you're

probably going to be looking more at

someone like a Kevin hasset I personally

wouldn't be surprised by that because

I'm not trying to sound offensive to

Kevin hasset maybe I have the wrong

impression here but I kind of feel like

hasset is somebody who's just going to

kind of do whatever Donald Trump wants

and that's going to give Donald Trump

significant power over monetary policy

and frankly in the short term it's

probably a good thing the Federal

Reserve in the short term is

probably too restrictive in terms of

their policy for what we deserve quite

frankly with an economy that's slowing

the jobs Market there is no question is

unmistakably slowing down there are

inventory Channel Corrections at

corporations pricing power is waning and

yeah that doesn't mean companies can't

beat earnings expectations earnings

expectations were revised down so it's

easier to beat that's sort of how

analysts pre- price earnings they revise

down and then they beat it's it's all a

game and the analysts kind of benefit

anyway when these stocks go up in my

opinion because that's how they keep

their jobs you keep pooping on companies

too much you end up getting fired nobody

likes a bear let's put it that way but

what's really interesting here is in the

short term bullying the Federal Reserve

to lower rates could help reduce the

impact of a recession and could be the

right thing to do however there are some

serious long-term concerns and this is

what CNN is freaking out about before I

mention that I do just want to quickly

mention tomorrow will be the second day

that I provide a a free Alpha report go

to me kevin.com Alpha uh this is going

to be our second report tomorrow I try

to get to you about 15 minutes before

the Market opens it comes to you with

trade ideas and options to watch

technical analysis to watch so if you

want to get that report make sure to get

it over at maven.com Alfa so with that

let's jump in over here to CNN for over

70 years the central bank has operated

as an independent it's basically a quasi

government agency when officials meet to

decide interest rates they don't consult

the president and that's because Central

Bankers should be essentially there to

remove the punch B right when the part's

getting started or to make just frankly

unpopular decisions like the party was

getting started in 21 and then the FED

starts u-turning in December of 2021 and

they take the punch bowl away that's

unpopular now in this case Federal

Reserve support would actually be very

popular because people want lower rates

the problem is when you remove that

Federal Reserve Independence you might

never end up pulling a December of 2021

again and that's where CNN basically

argues that you might end up taking that

Independence away and in the long term

you could reignite inflation by not

responding to an inflationary impetus of

the future and so I half agree with CNN

here and I half agree with Donald Trump

I actually think Donald Trump would be

right to mitigate the damage of this

recession that the Federal Reserve is

brewing they're all already behind the

curve so I think Donald Trump would be

right to beat up the fed and threaten to

fire Jerome poo or even do it if he

needs to to help prevent the odds of a

recession and support the American

economy it's going to need it over the

next year I'm highly confident of that

obviously I could be wrong that

said in the future you would want to

bring that Independence back to make

sure you do have a Fed that is willing

to take the punch bowl away do a

December of 2021 when it becomes

necessary to do so I don't know how easy

it would be to be able to switch back to

that so there you go could Powell get

fired absolutely is Donald Trump's

threat of firing Powell probably a good

thing for the economy yes but it's only

going to happen once the economy starts

really showing more severe and sustained

cracks if you look at interest rate

interest rate swaps this this gets a

little Arcane but if for example you go

to uh the 5year uh swap spread on Sofer

you're going to see on a chart that

they're going vastly negative heavily

negative like these spreads are usually

a sign of markets suggesting there's

some kind of tumult coming uh and when

you look at spreads they've basically

been going straight down since 2020 we

had lows in the summer of 2022 like July

19th of 22 that's when house Haack was

founded like at the bottom of that stock

market in 2022 that was crazy uh and

then you also had some pain at the end

of

2023 which is also when you had swap

spreads as NE or nearly as negative as

they are now but they've fallen off a

cliff and gone even more negative which

is a sign that markets think over the

longer term in this case the 5year

spread or the 10year spread interest

rates will end up going lower markets

are just mispricing that right now why

we don't know is it because the

recession's coming or there's some other

mistake I guess we'll find out anyway if

you found this useful consider

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thanks so much and goodbye why not

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man you have done so much people love

you people look up to you Kevin P there

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always great to get your take