Milk Road Macro Trump vs Powell: The Battle That Could Break the Fed w/ James Lavish
Jan 13, 2026
James Lavish, co-founder of the Bitcoin Opportunity Fund and macro investing expert, dives into the escalating conflict between Trump and Powell. He discusses how the political landscape influences Federal Reserve decisions and the implications for the U.S. financial system. Lavish emphasizes the risk of undermining trust in U.S. debt and the shift towards gold. He also shares insights on the barbell strategy of investing in AI stocks and Bitcoin as hedges against market fluctuations.
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Fed's Primary Role Explained
- The Fed's core job is to preserve confidence in the US dollar and Treasury markets.
- That role sits above rate politics and ultimately supports Treasury financing needs.
Why Rate Cuts Can Raise Long Yields
- Cutting short-term policy rates can raise long-term yields due to duration risk.
- The Fed cutting too early can push 10-year yields higher and raise mortgage costs despite lower Fed funds.
The Hard Hat Photo Op
- James recounts Trump publicly humiliating Jerome Powell over building renovation costs in a staged photo op.
- That moment set the tone for the administration's campaign to pressure the Fed on rates.