The Jacob Shapiro Podcast Our Currency, Your Problem
Jul 4, 2025
Rob Larity, an investment expert, shares his insights on market trends and investment strategies. He discusses the impact of interest rate dynamics, highlighting political interference and the role of Jerome Powell. The conversation delves into the Federal Reserve’s mechanics, historical tensions with presidential influences, and the latest outlook on bonds and equities. Larity also expresses cautious optimism for international markets and niche small-cap opportunities amidst current economic uncertainties.
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Interest Rates Will Stay Higher
- Jerome Powell is unlikely to cut interest rates drastically despite political pressure.
- The average level of interest rates will remain higher than pre-COVID due to structural economic changes.
Fed Is A Decentralized Network
- The Federal Reserve System is a federation of decentralized banks, not a single central bank.
- The Fed Chair must build consensus; he cannot unilaterally set interest rates.
Presidential Fed Pressure Is Old Story
- Political pressure on the Fed chair is not unprecedented; past presidents like Nixon and Truman also interfered.
- The Fed's independence is protected by design, making forced rate changes difficult.