Bloomberg Surveillance Markets and Fed Independence
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Aug 26, 2025 Libby Cantrill, Head of Public Policy at PIMCO, sheds light on the political dynamics surrounding Federal Reserve Governor Lisa Cook's controversial removal attempt by President Trump. Cam Harvey, a Duke University professor, discusses tariffs, rate cuts, and the ongoing risks to Fed independence. The conversation uncovers the impact of these political tensions on market stability and the potential legal battles ahead. They highlight the critical need for a balanced approach in navigating economic policies amid rising external pressures.
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Removing A Governor Raises Political Costs
- The Trump administration's push to remove Fed Governor Lisa Cook is aimed at changing Fed policy by reshaping the Board.
- Libby Cantrill warns this move is self-defeating because it raises confirmation hurdles and market uncertainty.
Account For Senate Confirmation Realities
- Senate confirmation dynamics matter: nominees need 50 votes and committee support to advance.
- Expect tougher vetting and harder confirmations after a high-profile removal attempt, per Libby Cantrill.
Get Congressional Authorization For Equity Stakes
- The government needs explicit congressional authorization to make equity investments in private companies.
- Libby Cantrill says using CHIPS Act funds for an $8.9bn Intel equity stake raises legal questions absent clear authorization.
