Bloomberg Surveillance Bloomberg Surveillance TV: April 22, 2025
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Apr 22, 2025 
Krishna Guha, Vice Chairman at Evercore ISI, shares his insights on the rocky outlook for US markets and the economy. Rob Sockin, Director of Research at Citi, highlights the risks stemming from President Trump's tariff policies and the potential fallout if Fed Chair Jay Powell is fired. These discussions explore how political maneuvers could destabilize economic confidence, impact Fed independence, and reshape trade dynamics amidst ongoing tensions that are steering the global economy.
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Fed Independence's Market Impact
- Markets react strongly to any threat against Fed Chair Powell's independence, causing yields to rise and the dollar to fall.
- This illustrates how vital Fed independence is to maintaining confidence in U.S. assets and avoiding stagflation fears.
Signs of Economic Shift Emerging
- Recent market moves show unusual dynamics like rising yields alongside a falling dollar, signaling capital is reallocating away from the U.S.
- Though not yet a regime change, these patterns suggest early signs of shifting economic fundamentals.
U.S. Resilience vs. Crisis Risks
- The U.S. economy is unlikely to experience a Liz Truss-style confidence collapse due to its global central role.
- However, a tariff crisis could escalate into a fiscal crisis if deficits grow without consolidation, raising investor risks.