
Trump Is Coming Around to Xi's Way of Thinking
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Donald Trump claimed at the weekend he has 'methods' to skirt America's constitution if he decides to seek a third term. Another world leader achieved a similar feat in 2018: Xi Jinping.

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A shadow Fed chief could lead to a ‘revolt' on the FOMC against Powell's successor, former vice chair warns
Former Federal Reserve Vice Chair Alan Blinder said naming a so-called shadow Fed chief well before Jerome Powell's term is up would sow confusion in financial markets and even set up a potential revolt against the eventual chair. Wall Street analysts also it is a self-defeating idea that would sink the U.S. dollar and Treasury bonds. Naming a so-called shadow chair for the Federal Reserve well before Jerome Powell is due to step down as the top central banker could blow up spectacularly. President Donald Trump said earlier this month his pick to replace Powell is coming 'very soon,' and on Friday even vowed to tap someone who will do what he has been pressuring the Fed to do for months. 'If I think somebody's going to keep the rates where they are or whatever, I'm not going to put them in,' Trump said. 'I'm going to put somebody that wants to cut rates.' That's after repeated insults and name-calling directed at Powell, who has held off on lowering rates, citing the resilient economy and the risk that Trump's own tariffs could reaccelerate inflation. Powell's term as chair expires in May 2026, and the typical transition to a new one is about three to four months, meaning a replacement pick would be named as soon as January under normal circumstances. By naming a new chair well before that, the nominee could in theory jawbone markets into easing financial conditions, such as lowering bond yields, before taking office and undermine Powell's messaging in his final months. But in practice, the result could be chaos. Princeton professor Alan Blinder, who served as the Fed's vice chair in the 1990s, told CNN that a shadow chair is 'an absolutely horrible idea' because markets would have to sort through potentially very different stances at the same time. 'If they're not singing from the same playbook, which seems likely, this is just going to cause confusion in markets,' he warned. Similarly, Michael Brown, senior research strategist at Pepperstone, said in a note that a shadow chair would be self-defeating and create 'chaotic policy rhetoric, thus further weakening policy transmission.' And the perception of greater political influence over the Fed is likely to result in accelerated outflows from both the U.S. dollar and Treasury bonds, pushing yields and other borrowing costs higher. 'Lastly, and probably of most annoyance for Trump, is that all of this nonsense actually makes the bar for the Fed to deliver a rate cut even higher, given mounting external pressure, and a desire to preserve policy independence,' Brown added. Fed officials make a point of sticking to central banking and not opining on politics, White House policies, or bills in Congress. On the flip side, they carefully guard the Fed's reputation for being independent from political pressure. Blinder flagged the risk that a shadow Fed chair would set up a big showdown in the usually consensus-driven Federal Open Market Committee, which sets rates. 'If he or she contradicts what Powell is saying, that will aggravate the FOMC, almost all of whose members will still be there when the new chair takes over,' he explained to CNN. 'It opens the door to an open or silent revolt against the chair, which is a rare thing in Fed history.' A schism is already emerging at the Fed. Trump-appointed governors Christopher Waller and Michelle Bowman have said a rate cut in July could be justified, while Powell and other policymakers have said more months of data are necessary to make such a call. Meanwhile, Treasury Secretary Scott Bessent downplayed the idea of a shadow Fed chair in an interview on CNBC on Friday, but also pointed out that Adriana Kugler's term as Fed governor expires in early 2026. 'So there is a chance that the person who is going to become the chair could be appointed in January, which would probably mean an October, November nomination,' he said. This story was originally featured on Sign in to access your portfolio


CNN
2 hours ago
- CNN
Trump's ‘big, beautiful bill' clears key Senate hurdle. CNN reporter breaks down how we got here
After an hours-long push by Senate GOP leaders Saturday, President Donald Trump's "big, beautiful bill" cleared a key procedural vote, 51-49. The vote allows the Senate to begin debating Trump's multitrillion-dollar bill, which would lower federal taxes and bring cuts to Medicaid.
Yahoo
2 hours ago
- Yahoo
Is Trump a genius? Top economist and tariff skeptic admits president may have outsmarted us all on the economy
Did President Donald Trump outfox the world with his tariff plan? Maybe, according to Torsten Sløk, the chief economist at Apollo Global Management. On Saturday, Sløk published a blog post titled "Has Trump Outsmarted Everyone On Tariffs?" In it, he explains a possible scenario in which Trump keeps tariffs below his highest threatened rates just long enough to ease uncertainty and avoid the economic pains that would come with massive tariffs. 'Maybe the strategy is to maintain 30% tariffs on China and 10% tariffs on all other countries and then give all countries 12 months to lower nontariff barriers and open up their economies to trade,' he wrote. The post comes just before a 90-day pause on Trump's "reciprocal tariffs" — which triggered a huge stock selloff in April — ends in early July, Fortune reports. The pause was meant to provide the U.S. and its trade partners time to negotiate deals, though few actually materialized, at least publicly. That said, the Trump administration has been saying for weeks that they are close to reaching deals with several unnamed trade partners. Sløk theorized that by extending that deadline by another year, other countries and U.S. businesses would have more time to adjust to a "new world with permanently higher tariffs," and would ease the immediate uncertainty rocking the markets. 'This would seem like a victory for the world and yet would produce $400 billion of annual revenue for U.S. taxpayers,' he wrote. 'Trade partners will be happy with only 10% tariffs and U.S. tax revenue will go up. Maybe the administration has outsmarted all of us.' Sløk previously was a critic of Trump's tariff plan, and it does not appear that his position will change if the president continues his erratic and aggressive tariff program. But he has identified what he believes would be a way to come out on top — so long as the president is willing to play a longer game. Trump may or may not be willing to do that. He seems to have responded negatively to the TACO nickname he's been given by Wall Street — standing for Trump Always Chickens Out — and as a result may refuse to back off any of his proposed policies, even if it makes more sense to do so. Sløk warned in April that a U.S. and China trade war would cripple American small businesses, and advised that providing some sense of stability would give the Federal Reserve a better view on inflation. As it stands now everyone from heads of state to small business owners are in a wait-and-see pattern, unsure of how to proceed in the choppy economic waters Trump has created. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data