Bob Murphy

Like those guys are so smart and wise.

You know what I mean?

So there is that sort of thing in the rhetoric that there are some some funny elements of it.

But but you're right to your question specifically.

One way of tension between what the Fed is doing and the White House, and so that was resolved when Powell came out announcing that, hey, he was being probed and so forth, was there was an element of the late October Fed meeting when they released their minutes and talked about policy, where they said they were gonna continue to let mortgage-backed securities roll off the balance sheet, but beginning in December, they were gonna start reinvesting that and have the treasury balances start accumulating.

So clearly they were signaling, yeah, even though we're sort of adjusting our stance, we're no longer overall shrinking the balance sheet.

They were still signaling, but we are still unwinding the mortgage backed securities like that element of our footprint we're getting out of.

And so that, you know, of course, would put pressure, you know, push up mortgage rates and put pressure on investors.

And I had been telling our clients and things that, hey, I'm concerned about housing in 2026 for this reason.

And so then when Trump recently announced that he was ordering, I think it was on a Truth Social post that he wanted, it turned out people thought he meant Fannie and Freddie to buy 200 billion of mortgage-backed securities.

At that point, when he first made that announcement,

I didn't know, oh, were they coordinating behind the scenes or are they just actively trying to thwart the Fed?

And then it was the next week that Powell came out announcing about the criminal investigation.

So to me, yes, it clearly looks like they are at odds on that issue.

Just more generally, if you looked at the Fed as just like a foreign country,

It's holding more treasury securities right now, $4 trillion and change than the next five or six countries put together.

China only has $686 billion or something like that.

So in terms of just the power the Fed has and the ability to sort of stick it to the federal government and what they want to do, they announced a $1.5 trillion military budget for next year, right?

They clearly need to have deficit financing.

They need the Fed to be on board.