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* FIEND'S SUPERBEAR MARKET
REPORT *
* August 26,
2025 *
* *
* e-mail:
fiendbear@fiendbear.com
*
* web
address: http://www.fiendbear.com *
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Fiend Commentary
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Going into
Tuesday, the story isn’t just “rate cuts someday”—it’s who controls the
cutting. President Trump says he has fired Fed Governor Lisa Cook
over alleged mortgage improprieties; Cook disputes it and vows to stay, setting
up a legal fight over whether a president can remove a Fed governor and on what
grounds. If this standoff broadens—paired with daily pressure on Chair
Powell—the independence of U.S. monetary policy becomes the market risk
hiding in plain sight.
Why it
matters: if the White House can lean on the Board, you flirt with fiscal
dominance—policy tilted toward near-term growth or political aims, with
longer-run costs in inflation credibility and a higher term premium.
Near term, that can look like front-end relief (cuts) but long-end stress
(steeper curve, heavier multiples). The tape is celebrating easing; it’s not
pricing governance risk.
Political
snapback risk cuts the other way: a court battle or congressional response
could re-codify Fed independence, introducing uncertainty over
composition and cadence just as markets crave clarity.
Opinion, not
advice:
This is bigger than one personnel move. Markets can live with “higher for
longer” or “earlier cuts.” They struggle with who’s driving. If policy
independence wobbles, the eventual repricing won’t be about the next 25
bps—it’ll be about trust.
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