Bloomberg Daybreak: US Edition Daybreak Holiday: Trump versus Powell, ETF Inflows, Antitrust in Focus
Apr 17, 2025
Michael McKee, a seasoned Bloomberg International Economics and Policy Correspondent, dives into the tension between President Trump and Fed Chair Powell, emphasizing the importance of central bank independence. Eric Balchunas, an ETF expert, examines recent shifts in market dynamics, revealing investor tendencies towards cash-like ETFs amidst volatility. Finally, Jennifer Rie, a Senior Litigation Analyst, unpacks the ongoing antitrust battles with big tech, particularly the FTC's efforts against Meta, spotlighting the complexities of proving anti-competitive behavior.
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Fed Chair Powell's Independence Questioned
- President Trump’s threat to fire Fed Chair Powell challenges the traditional Fed independence and raises legal questions about the president’s power.
- Powell’s term ends in May next year, so any immediate firing attempt might be moot and complicated by the Fed’s structure.
Fed Stance on Tariffs and Inflation
- Fed Chair Powell warns tariffs will likely cause higher inflation and slower growth, indicating no immediate rate cuts.
- Markets misprice the likelihood of rate cuts this year, expecting more easing than Powell suggests.
Economic Impact of Tariffs Explained
- Tariffs are paid at U.S. ports by importers, but the true economic burden depends on whether companies can pass costs to consumers.
- High tariffs can push inflation up by about two percentage points but may also reduce demand, limiting passthrough.