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What is the story behind the alleged firing of Fed Governor Lisa Cook?
It's like the apprentice all over again. You're fired. Only this time it's a Fed governor being fired. Supposedly Lisa Cook is being sent packing. But there is the small issue of the law. However, it turns out it's ugly, but markets aren't reacting too much to this challenge to the autonomy of the Fed. Plus, in the latest consumer confidence data from the United States, concern over jobs continues to rise. And Aussie inflation today as well. It's Wednesday, it's the Twenty seventh of August twenty twenty five. It's the morning call from Nab. Good morning. Well, US equity has finished higher today, finishing at or close to session highs. So naught point three per cent up for the down, not point four percent for the S P, and a bit higher than that for the Nasdaq, compared to sizable falls in Europe with one point one percent off the Eurostocks fifty, a one point seven percent drop in the CAC current, the DAX is down half a percent, the FTSE one hundred uh closed down naught point six percent, a quarter percent drop in the US dollar.
On the DXY, uh, and compared to that, in contrast, a quarter percent rise in the Aussie, just a little shy of sixty five US cents now. Also a quarter percent rise in the pound, the euro, uh, and the yen, all up a similar amount. That keeps it uh sweet, doesn't it? And ten year treasury yields, down two basis points, down three for German Bundes, uh, but up five basis points for UK ten year guilt, Aussie ten years, up three basis points yesterday to four point three one percent now, a couple of basis points higher this morning on uh on futures. And oil, we've got a two point three percent drop in WTI and a two point two percent drop in Brent, which is now below sixty seven thirty a barrel. And here's Nab's Taylor Nugent again.
Uh on uh the day of some big news, very big news. Well my daughter tells me the big news actually is that another Taylor, uh Taylor Swift has just got engaged. But otherwise uh the the
How are US equity markets and bond yields reacting to the latest Fed commentary?
The big news is the supposed firing of Lisa Cook by President Trump. Nobody is sure whether he has or not. It's open to legal conjecture. But he posted on social media that he was removing hair over these allegations of mortgage fraud that we've been hearing about for a while now. Uh but Taylor, I mean, the market hasn't really paid too much attention to this. I mean the yield curve is a bit steeper, isn't it? But uh I guess if he is successful Which seems perhaps doubtful, then maybe it'll be a different story.
Yeah, good good morning, Phil. That's certainly the the big news and as you say, in general a reasonably muted market reaction, even if the kind of you know, initial response is is as as you would expect, steeper curves, lower currency, but you know, f fairly small small moves overall. Um in terms of, you know, what has actually happened at the moment. Um Trump has has uh said he's issued a letter um saying that he um would be uh firing uh Fed Governor Cook foreclos. Um the president has has authority to um to fire um governors for cause. What that forecalls test is is kind of very unclear. Um it's untested. There's not a lot of legal precedent for that according to the reporting that I'm reading. And so it's kind of fairly murky what happens from here.
Cook has said that she she wa doesn't intend to to step down and will will challenge this in court. Um and so I guess in the near term, you know, the the expectation does seem to be that there will be kind of an initial injunction and then this will be this will be tested in in the courts. And so, you know, the potential there is that even if this is is expedited, if it does kind of go all the way up to the Supreme Court, it's a process that's, you know, likely to take months, not weeks, and so there will be some uncertainty in the background for for a while, yeah. Sunday.
Meanwhile it was interesting uh hearing Fed's uh j the Fed's John Williams uh giving the usual lines to the not out of the woods, you know, in terms of inflation. He's in wait and see mode, uh an expression that's been used a lot.
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Chapters
8 chapters
1
What is the story behind the alleged firing of Fed Governor Lisa Cook?
0:02–1:48
2
How are US equity markets and bond yields reacting to the latest Fed commentary?
1:48–3:41
3
What did John Williams say about the Fed’s “wait‑and‑see” stance and neutral rates?
3:41–6:17
4
Why is the Fed’s independence being questioned and what could it mean for policy?
6:17–8:10
5
What do the latest US durable‑goods orders and consumer confidence data reveal?
8:10–10:06
6
How is the political deadlock in France affecting its bond market and equity performance?
10:06–12:09
7
What are the key takeaways from the RBA minutes and the outlook for rate cuts?
12:09–14:03
8
How will the upcoming Australian CPI numbers influence inflation expectations and the RBA’s stance?
14:03–15:28