This Is What No One Is Talking About After Trump & Powell's Ultra-Awkward Meeting At Federal Reserve

Key Concepts:

1. Federal Reserve Independence and Monetary Credibility

Main Point: The speaker, Spencer Akemian, emphasizes the importance of the Federal Reserve's independence and the erosion of monetary credibility in the U.S.
Details:
- He argues that the Fed is becoming increasingly partisan, with presidents appointing only members of their own party to the Fed board.
- He draws a parallel to the Supreme Court, which he believes has also become increasingly partisan.
- He states that the Fed is the most important public institution in the United States because they are the lender of last resort.
Consequences of Partisanship:
- Higher bond yields
- Higher mortgage costs
- Higher auto loans
- Higher construction costs
- Higher credit card interest
Role of the Fed Chair: The Fed chair is the most visible member of the board, making their independence crucial.
Personal Opinion on Jerome Powell: While advocating for Fed independence, the speaker expresses disagreement with Powell's policies from January 2021 onward, criticizing him for keeping stimulus measures in place for too long, leading to high inflation. He supported Powell's actions during the 2020 Coronavirus crisis.
Inflation Impact: The speaker argues that the inflation resulting from Powell's delayed action acted as a permanent tax hike on the American people.

2. Trump's Proposed Tariff Rebates

Main Point: The speaker analyzes Trump's proposal to provide rebates to Americans from tariff revenue, deeming it logically inconsistent and potentially inflationary.
Details:
- Trump is marketing the rebates as a transfer of wealth from foreign entities to American citizens.
- The speaker argues that tariffs are already increasing prices for American consumers.
Inflation Problem:
- Trump is facing an inflation problem, which is negatively impacting his polling numbers, particularly among independent voters.
- Atlas Intel polling suggests Trump has lost 35 points on inflation since January.
Inconsistency: The speaker questions the logic of collecting tariffs and then returning the money to consumers, suggesting it would be better not to impose the tariffs in the first place.
Inflationary Risk:
- Rebates could create a self-fulfilling cycle of inflation by enabling consumers to afford the higher prices caused by tariffs.
Alternative Revenue Generation: The speaker suggests that taxing consumption, especially for the poor and middle class, may not be the best way to generate tax revenue.

3. Japan's Dispute of Trade Deal

Main Point: The speaker discusses Japan's reported disagreement with aspects of the trade deal supposedly reached with the United States.
Source: The Financial Times reported on Japan's disputes.
Disputed Points:
- Rice imports
- Car quotas
- $550 billion signing bonus
Lack of Enforcement: The speaker expresses concern about the lack of enforceability of these trade deals.
Phase One China Deal Example: He cites the example of the Phase One trade deal with China, where China failed to meet its purchase commitments for agricultural products.
Legal Binding: The speaker emphasizes the difference between a non-binding agreement and a legally enforceable contract.
August 1st Deadline: The speaker urges viewers to monitor the situation as the August 1st deadline approaches to see if the deals can be enforced.

4. Conclusion

Main Takeaways: The speaker highlights the importance of maintaining the Federal Reserve's independence, questions the logic and potential inflationary impact of Trump's proposed tariff rebates, and raises concerns about the enforceability of trade deals, particularly in light of Japan's reported disputes. He emphasizes the need for these agreements to be legally binding to be effective.