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Treasury Secretary Scott Besant, he said he's been working behind the scenes cautioning President Trump and White House officials to say, look, this is something you don't want to mess with. He has previously said publicly
uh the fed independence is the jewel box that has got to be preserved so he's pushing back on this within the administration saying this is just a line you can't cross or else investors will lose faith in the entire system right and this goes back to this 1970s actually because the fed has guarded its monetary policy since then because at the time president richard
Nixon privately was pressuring his Fed chairman, Arthur Burns, to ease policy ahead of his election. Because you're right, these political people think in terms of election years. And that pushed the U.S. into this punishing recession. And the early 1980s were just kind of a disaster. And so the Fed and a lot of central banks around the world kind of pushed for their operational autonomy here.
gaining the independence that they now have today. And a lot of investors look at Fed independence as a key ingredient to creating this environment to foster lower inflation, less risk, to bring investment into the country. It is the stabilizing force when it comes to U.S. markets.
And so if that comes under much more fickle political power, then you don't have any of those benefits that an independent Fed has granted you.
Meanwhile, Powell is just in a pickle here. I mean, it's a really tough job he has here because he, you know, in that speech on Wednesday, he warned that the tariffs were much greater than the worst case scenario that anybody at the Fed projected. So tariffs, he expects, will lead to higher than expected inflation and lower growth. And like, as you mentioned, I mean, that is just...
those are clashing priorities because the feds has two mandates, which is to keep inflation low and employment high. Those are now clashing. He can't raise interest rates because that would send the economy into a recession. He can't lower them because he's also worried about the inflation. So there are these two competing priorities. He's not sure exactly which ones to prioritize.
So we're in this moment of stasis where the fed held interest rates, uh, at their current level for the first two meetings. And it looks like we're just in this wait and see approach because when you move one lever, it affects the other in a bad way. Same vice versa. So Powell's just in this state of paralysis. Powell's in a pickle. I like it.
Netflix reported earnings yesterday, and it turns out you can't tariff. Love is blind. The biggest streamer in the world had another blowout quarter, posting a major earnings beat as revenue grew 13% in Q1 and surpassed $10.5 billion. As tariffs throw other sectors into turmoil, the streaming giant is looking like the calm in the macroeconomic storm.
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