Kevin O'Leary warned against President Trump's consideration of firing Federal Reserve Chair Jerome Powell, stating that it would cause negative reactions in the market. Trump expressed dissatisfaction with Powell's performance, particularly regarding interest rates. O'Leary noted that all administrations criticize the Fed, but maintaining its independence is crucial for America's investment reputation. He emphasized the potential market consequences of firing Fed officials and reflected on the broader policy issues related to bank reserves, particularly involving foreign banks.
Fed bashing is what every administration does. However, the Fed independence is what gives America its position as the number one place to invest on Earth.
It would be very, very difficult to have presidents firing Feds. That would not be taken well by the markets, and I think Trump knows that.
It's always fun to bash the Fed. I mean, if I were the president, I'd bash the Fed, too.
There are some good questions about policy. Why are we paying interest, for example, on bank reserves when half the banks are foreign?
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