Investors React To News Miran Picked By Trump To Be Fed Governor

Summary:

U.S. President Donald Trump on Thursday said he will nominate Council of Economic Advisers Chairman Stephen Miran to serve as a Federal Reserve governor.

Here are some investor comments about the impact to markets:

ANDREW BRENER, HEAD OF INTERNATIONAL FIXED INCOME SECURITIES NATALLIANCE SECURITIES, NEW YORK:

"Our view is he is very controversial and will not pass the Senate. He will try to change the Fed. First he has no experience. No street. No business. Always politics."

ROBERT TIPP, CHIEF INVESTMENT STRATEGIST, HEAD OF GLOBAL BONDS, PGIM FIXED INCOME, NEW YORK:

"So far bashing the Fed this term has been fruitless, or possibly even counter-productive — it certainly appeared to be counterproductive in the December 2018 Trump/Powell episode …

Presumably it (Miran's appointment) will have at least a marginal impact — but it will depend on the pliability of the rest of the committee members — which is certainly not a given.

Furthermore, as situations evolve, and nominees become acting chairs, there is at least one prominent example of a Fed Chair — the first appointee following the 1951 Accord, Martin, who worked on the Accord from the administration's side – (who) proceeded in his long tenure to anger more than one president with his tight money policies ...

Again, while Trump is likely to choose someone more aligned with his thinking than Powell, the impact may not prove as material as some may fear."

RYAN SWEET, CHIEF US ECONOMIST, OXFORD ECONOMICS, PHILADELPHIA:

"I don't think it means too much in the context of altering the course of monetary policy.

I think the biggest question mark is whether or not he gets confirmed in time to vote at the September meeting. If he does, then that increases the odds that we get three dissents if the Fed opts to not cut in September.

I do think the odds of a September cut are rising, not because of this nomination, but just because of the recent data on the labor market."

TOM DI GALOMA, MANAGING DIRECTOR OF RATES AND TRADING, MISCHLER FINANCIAL, PARK CITY, UTAH:

"Stephen Miran will be good for the Fed because he will probably be inclined to lower rates. And I think he worked in the first Trump administration. So he has been in two Trump administrations. I think it's going to be a long-term deal for Miran and he will be Fed governor for a while. I don't think this is something that they want to do temporarily."

JOHN VELIS, AMERICAS MACRO STRATEGIST, BNY, NEW YORK:

"A bit of surprise to nominate Miran – he wasn't mentioned as a likely candidate by markets, although he is likely to be a reliable dove, given his current political position (as Chair of CEA) and his public comments to date.

"This is a recess appointment, so it does not need Senate confirmation. As far as I understand about recess appointments, they remain valid until the next session of the Senate is complete.

"This still doesn't remove the current chatter about Christopher Waller being named Fed Chair to replace Powell."

JAY HATFIELD, CHIEF EXECUTIVE OFFICER, INFRASTRUCTURE CAPITAL MANAGEMENT, NEW YORK:

"Miran is somewhat unconventional for this job because he was head of the Council of Economic Advisors and has made some controversial or hard to justify comments about forcing people to buy Treasuries, which doesn't make any sense. But I don't think this is going to be relevant to serving on the Fed board."

"It's an insider, someone who's willing to take one for the team because it's not that great of a position to be the...governor for a short period of time. It's a fairly practical decision because you can't recruit someone from the private sector for such a short period."

The main focus is on the Fed chair appointment, but he believes Miran will put more pressure on Powell to lower rates.

MARC CHANDLER, CHIEF MARKET STRATEGIST, BANNOCKBURN GLOBAL FOREX, NEW YORK:

"I don't think it really matters much because people like me have more or less decided that the Federal Reserve is most likely going to cut rates in September and probably at least one more cut before the end of the year."

"At the end of the day does it really influence our outlook for the Federal Reserve? I'd say probably not."

"Is he qualified? I'd say, yes... he is an economic advisor to the President. He obviously understands the markets. Broadly speaking, we should welcome the view that the Federal Reserve is not going to be picked from a very small inner circle of people."

Source: Reuters

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Winkelmann

Stocks

Political

Economic

U.S. President Donald Trump signed an executive order on Thursday that aimed to allow more private equity, real estate, cryptocurrency, and other alternative assets in 401(k) retirement accounts – opening the way for alternative asset managers to tap a greater share of trillions of dollars in Americans' retirement savings.The White House said regulatory overreach and litigation risks have prevented retirees from benefiting from potentially higher returns, while critics warned the investments were inherently riskier, lacked the same disclosures and carried higher fees than traditional retirement investments.

"My Administration will relieve the regulatory burdens and litigation risk that impede American workers’ retirement accounts from achieving the competitive returns and asset diversification necessary to secure a dignified, comfortable retirement," the order said.It directed the Labor Secretary and Securities and Exchange Commission to make it easier for investors to access alternative assets in their defined contribution retirement plans. It did not expressly ask the agencies to add more legal protections for investments, but directed them to clarify or potentially revise rules that could help shield the industry from litigation risk.

Asset managers welcomed the news, saying it was a major step toward modernizing retirement savings."Expanding access to investments long out of reach will help ensure millions of Americans build stronger, more diversified portfolios designed to increase savings and address the practical considerations of DC plan fiduciaries," Jaime Magyera, head of retirement for leading asset manager BlackRock (BK.N), opens new tab said in a statement, referring to defined-contribution plans like 401(k)s.

The move could be a boon for big alternative asset managers such as Blackstone , opens new tab, KKR , and Apollo Global Management , opens new tab by opening the $12-trillion market for all defined-contribution plans, of which 401(k)s are the most popular, to their investments. Some of those firms have already struck partnerships with asset managers who run those plans. A Blackstone spokesman said the firm welcomed the decision.BlackRock, which lobbied the Trump administration to expand asset options, plans to launch its own retirement fund that includes private equity and private credit assets next year.

Proponents have argued that younger savers can benefit from potentially higher returns on riskier investments in funds that get more conservative as they approach retirement.

"On the asset manager side, it's a $12-trillion retirement market that they have previously not had access to. For them, there's certainly a lot of opportunity," said Morningstar analyst Jason Kephart."From the individual investor standpoint, though, that's where it's less clear after all the additional fees, the additional complexity, and less transparency," Kephart added.

The new investment options carry lower disclosure requirements and are generally less easy to sell quickly for cash than the publicly traded stocks and bonds that most retirement funds rely on. Investing in them also tends to carry higher fees.In defined contribution plans, employees make contributions to their own retirement account, frequently with a matching contribution from their employer. The invested funds belong to the employee, but unlike a defined benefit pension plan, there is no guaranteed regular payout upon retirement.

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Many private equity firms are hungry for the new source of cash that retail investors could offer after three years in which high interest rates shook their time-honored model of buying companies and selling them at a profit.Whatever results may come from Trump's order, it likely will not happen overnight, private equity executives say. Plaintiffs' lawyers are already preparing for lawsuits that could be filed by investors who do not understand the complexity of the new forms of investments.

BlackRock CEO Larry Fink acknowledged in a recent call with analysts that the change posed challenges for asset managers."The reality is, though, there is a lot of litigation risk. There's a lot of issues related to the defined contribution business," Fink said. "And this is why the analytics and data are going to be so imperative way beyond just the inclusion."

CFO Martin Small said the industry may seek litigation reform before it can expand into the market.The Department of Labor issued guidance during Trump's previous presidency on how such plans could invest in private equity funds within certain limits, but few took advantage, fearing litigation.Easing access to cryptocurrencies to be included in 401(k)s would be Trump's latest embrace of digital assets, and could be a potential boon for the sector, including asset managers that operate crypto exchange-traded funds, such as BlackRock and Fidelity.

"Bitcoin has moved beyond its early days as a merely speculative asset and is slowly entering into many investors’ long-term investment strategy," said Gerry O'Shea, head of global market insights at Hashdex Asset Management. "This EO will help accelerate this trend."Democratic Senator Elizabeth Warren wrote in June to the CEO of annuity provider Empower Retirement, which oversees $1.8 trillion in assets for more than 19 million investors, asking how retirement savings placed in private investments could be safeguarded "given the sector's weak investor protections, its lack of transparency, expensive management fees, and unsubstantiated claims of high returns."

Source: Reuters

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Samantha Luan

Economic

In a much-anticipated move, the BoE cut its Bank Rate by 25 basis points to 4.00% early Thursday morning. Five of nine Monetary Policy Committee members voted in favor of the cut, with the other four voting to leave the rate unchanged.The central bank said that it had room to cut rates as inflation has continued to fall.

“There has been substantial disinflation over the past two and a half years, following previous external shocks, supported by the restrictive stance of monetary policy,” the BoE said in its statement. “That progress has allowed for reductions in Bank Rate over the past year. The Committee remains focused on squeezing out any existing or emerging persistent inflationary pressures, to return inflation sustainably to its 2% target in the medium term.”Looking ahead, the BoE said that it expects to cut rates further in 2025, but it will proceed with caution.

“A gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate,” the statement said. “The restrictiveness of monetary policy has fallen as Bank Rate has been reduced. The timing and pace of future reductions in the restrictiveness of policy will depend on the extent to which underlying disinflationary pressures continue to ease. Monetary policy is not on a pre-set path, and the Committee will remain responsive to the accumulation of evidence.”Gold sold off against the British pound following the rate cut and signal of further easing. XAU/GBP last traded at £2,514.67 an ounce for a loss of 0.30% on the day.

Source: Kitco

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Liam Peterson

Key Takeaways:

● Main event: Trump nominates pro-Bitcoin advocate to Fed Board.

● Stephen Miran known for promoting economic growth policies.

● Nominations may lead to increased crypto market optimism.

Trump Nominates Stephen Miran to Federal Reserve Board

President Trump has nominated pro-Bitcoin advocate Stephen Miran to the Federal Reserve Board, sparking discussions across U.S. economic and financial sectors.

Miran's nomination signals potential shifts in Federal Reserve policies towards lower interest rates, influencing cryptocurrency markets by enhancing liquidity and impacting the value of assets like Bitcoin and Ethereum.

President Trump has nominated Stephen Miran to the Federal Reserve Board, a decision generating discourse among financial experts. Miran, a known proponent of cryptocurrency, brings an expectation for pro-growth policy shifts at the institution.

Stephen Miran is involved, taking actions that lean towards delivering a pro-growth economic agenda through adjusted monetary conditions. His nomination implies a shift at the Federal Reserve, focusing on reducing regulations and fostering lower interest rates.

The nomination impacts expectations in financial markets with potential adjustments towards lower interest rates.

Financial implications involve potentially looser monetary conditions, fostering borrowing and investing activity. Politically, this move suggests a more market-oriented Federal Reserve approach, aligning with Miran's historical economic positions during prior administration roles.

Eyes are on how financial markets react, especially concerning risk assets.

Tim Scott, Chairman, Senate Banking Committee, stated, "Stephen Miran is an accomplished economist and has been instrumental in advising on economic policy and advancing a pro-growth agenda in his role as CEA Chair. I look forward to quickly considering his nomination."

Source: CryptoSlate

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Daniel Carter

Central Bank

Economic

Mexico's central bank slowed the pace of monetary easing by reducing its benchmark interest rate by a quarter percentage point, instead of continuing with a recent string of half-point cuts.

The smaller reduction of the key lending rate comes at a time of slowing growth in Latin America's No. 2 economy, and as headline inflation cools but core inflation remains sticky above the bank's target range.

Banxico, as the bank is known, cut its benchmark rate to 7.75% on Thursday, as expected by 26 of 27 economists surveyed by Bloomberg. The lone dissenter expected it to hold the rate steady. The decision was split, with Deputy Governor Jonathan Heath voting to pause the easing cycle. With its latest rate cut, the bank has pushed down borrowing costs at each of its past nine policymaking sessions.

In June, Banxico raised its inflation expectations for the rest of this year and for the first quarter of 2026, after prices sped up in April and May. The bank still expects inflation to converge to its 3% target, plus or minus 1 percentage point, in the third quarter of next year.

Annual inflation slowed to 3.51% in July, below the 3.53% median estimate of economists surveyed by Bloomberg. Meanwhile, the core reading, which strips out volatile food and fuel prices, inched down to 4.23% in July from 4.24% the month before.

Heath said last month that the slowdown in headline inflation wasn't enough to warrant another interest rate cut in August. In an interview, he stressed worries about the persistence of core inflation since it sets the medium-term trend for the evolution of consumer prices.

Despite the stubbornness of core inflation, the bank has expressed concern for Mexico's economic slowdown amid the constant threats of tariffs on Mexican exports to the US, Mexico's top trading partner. President Claudia Sheinbaum struck a deal with Trump in late July to temporarily avoid higher US tariffs while engaging in negotiations over a 90-day period. But levies have already hit the local auto and metals sectors, as well as goods not covered by the USMCA regional free trade pact.

The nine consecutive rate cuts could stimulate the economy at a time of uncertainty. Banxico's cycle of cuts kicked off in March of last year, as it gradually lowered its interest rate from 11.25%.

The Mexican economy expanded 0.7% in the second quarter compared with the first.

In May, the central bank cut its 2025 economic growth estimate to 0.1%, from 0.6% previously. Governor Victoria Rodriguez said then that the bank sees a period of sluggishness going forward, "but not a recession."

Analysts in the latest Citi survey published this week expect the key rate to fall to 7.5% by the end of 2025. They estimate the economy to grow a mere 0.3% this year, with inflation of 4%.

Source: Bloomberg Europe

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Manuel

Economic

President Donald Trump unexpectedly summoned reporters to the Oval Office on Thursday to present them with charts that he says show the U.S. economy is solid following a jobs report last week that raised red flags and led to the Republican firing the head of the Bureau of Labor Statistics.

Joining Trump to talk about the economy was Stephen Moore, a senior visiting fellow in economics at the Heritage Foundation, a conservative think tank, and the co-author of the 2018 book “ Trumponomics.”

Flipping through a series of charts on an easel, Moore sought to elevate Trump's performance as president and diminish the economic track record of former President Joe Biden. Trump stood next to Moore and interjected with approvals.

The moment in the Oval Office spoke to the president's hopes to reset the narrative of the U.S. economy. While the stock market has been solid, job growth has turned sluggish and inflationary pressures have risen in the wake of Trump imposing a vast set of new tariffs, which are taxes on imports.

Moore said he phoned Trump because he put together some data that shows he was correct to dismiss Erika McEntarfer as the head of the BLS. He noted that’s because reports from the BLS had overestimated the number of jobs created during the last two years of Biden’s term by 1.5 million.

“I think they did it purposely,” said Trump, who has yet to offer statistical evidence backing his theory. Revisions are a standard component of jobs reports and tend to be larger during periods of economic disruption.

The economy has seldom conformed to the whims of any president, often presenting pictures that are far more mixed and nuanced than what can easily be sold to voters. Through the first seven months of this year, employers have added 597,000 jobs, down roughly 44% from the gains during the same period in 2024.

The July jobs report showed that just 73,000 jobs were added last month, while the May and June totals were revised downward by 258,000.

While Biden did face downward revisions on his job numbers, the economy added 2 million jobs in 2024 and 2.6 million in 2023.

The fundamental challenge in Biden's economy was the jolt of inflation as the annual rate of the consumer price index hit a four-decade high in June 2022. That level of inflation left many households feeling as though groceries, gasoline, housing and other essentials were unaffordable, a sentiment that helped to return Trump to the White House in the 2024 election.

There are signs of inflation heating back up under Trump because of his tariffs. On Thursday, Goldman Sachs estimated that the upcoming inflation report for July will show that consumer prices rose 3% over the past 12 months, which would be up from a 2.3% reading in April.

Trump promised that he could galvanize a boom. And when nonpartisan data has indicated something closer to a muddle, he found an advocate in Moore, whom he nominated to serve as a Federal Reserve governor during his first term. Moore withdrew his name after facing pushback in the Senate.

Moore said that through the first five months of Trump's second term in office that “the average median household income adjusted for inflation and for the average family in America, is already up $1,174.” Moore said his numbers are based on unpublished Census Bureau data, which can make them difficult to independently verify.

“That’s an incredible number,” Trump said. "If I would have said this, nobody would have believed it."

Source: Bloomberg

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Daniel Carter

Political

Key Points:

● Stephen Miran nominated for Federal Reserve Board by Trump.

● Possibly influences economic strategies.

●Senate approval pending for new appointment.

Donald Trump has nominated Stephen Miran, a noted economist proponent of Bitcoin, for the Federal Reserve Board of Governors position vacated by Adriana Kugler.

Miran's nomination may influence economic strategies and potentially impact cryptocurrency market sentiment, although no immediate asset-specific effects have been documented.

Donald Trump has nominated Stephen Miran, chair of the White House's Council of Economic Advisers, to fill a vacancy on the Federal Reserve Board. The nomination awaits Senate approval. Miran's previous government experience may influence his tenure.

Miran, a Harvard Ph.D. holder, served as a top economic adviser in Trump's first administration. His expertise lies in growth strategies and economic policies. Key officials praise his past contributions to economic agendas.

The nomination might impact financial markets, though no immediate effects have been reported. Economic policy shifts could occur if Miran introduces his pro-growth strategies. Market speculation remains possible despite the absence of direct cryptocurrency policy statements.

Political implications may surface as the Senate Banking Committee evaluates Miran's methods. Elizabeth Warren raises questions about Miran's independence, focusing on previous tariff policies under Trump.

Potential changes in economic strategies could emerge, influencing growth-focused policies. The financial sector watches closely, yet immediate effects on cryptocurrencies remain undocumented. Miran's pro-growth policies could reshape fiscal applications over time.

Historical patterns indicate that Fed nominations can lead to market debate. Previous nominations displayed limited immediate crypto impacts without clear digital asset strategies. Investors remain attentive to possible shifts in macroeconomic policies.