My biggest concern: will Warsh be independent, given his close ties with Trump? And always: I am not a fan of supply side economics. Instituted in the Reagan years as the central philosophy of U.S. economic policy, the gap between the haves and have nots has only widened.
Great questions. On independence: the Fed has formal insulation (long terms and “for cause” protections for governors), but markets can still discount independence if the chair is perceived as politically constrained and/or publicly pressured. The practical test is the reaction function: does policy respond to inflation and employment, or to the political calendar and asset prices?
On supply-side economics: I share your skepticism that “cut taxes and wait” reliably produces broad-based prosperity. Over the last few decades, a disproportionate share of the gains has accrued to asset holders rather than wage earners. A healthy growth model has to be earned through productivity, capex, and wage growth—not primarily financed through policy support and asset inflation. Bessent and Warsh have both acknowledged this dynamic— the question is can they manage it effectively.
Hey, great read as always. It's realy insightful to articulate the distinction between 'buying growth' and 'earning it through productivity' so clearly. The emphasis on capital expenditure as a leading indicator for sustained economic health and job creation resonates strongly with historical patern.
Thank you — that distinction is the core of what I’m trying to get at. Economies can borrow demand for a while, but only productivity-driven investment compounds into durable jobs. Capex is where the future shows up first. Question is will it turn into jobs.
Sharp framing on the independence earned through competence idea. The plot armor line cuts through alot of Fed mystique, its basically saying credibility comes from results not from asserting authority. Watching capex breadth vs narrow finacial gains will be the real tell here, probably more honest than any policy statement.
Same here—I’ll choose America every time. But I try not to get greedy. Markets can run higher, but after these upside moves it feels like a moment to trim risk and protect the base.
For perspective, the market had 3 standard-deviation upside move in the past month or so. I am reducing exposure, banking some gains, and keeping dry powder for when momentum flips.
My biggest concern: will Warsh be independent, given his close ties with Trump? And always: I am not a fan of supply side economics. Instituted in the Reagan years as the central philosophy of U.S. economic policy, the gap between the haves and have nots has only widened.
Great questions. On independence: the Fed has formal insulation (long terms and “for cause” protections for governors), but markets can still discount independence if the chair is perceived as politically constrained and/or publicly pressured. The practical test is the reaction function: does policy respond to inflation and employment, or to the political calendar and asset prices?
On supply-side economics: I share your skepticism that “cut taxes and wait” reliably produces broad-based prosperity. Over the last few decades, a disproportionate share of the gains has accrued to asset holders rather than wage earners. A healthy growth model has to be earned through productivity, capex, and wage growth—not primarily financed through policy support and asset inflation. Bessent and Warsh have both acknowledged this dynamic— the question is can they manage it effectively.
Hey, great read as always. It's realy insightful to articulate the distinction between 'buying growth' and 'earning it through productivity' so clearly. The emphasis on capital expenditure as a leading indicator for sustained economic health and job creation resonates strongly with historical patern.
Thank you — that distinction is the core of what I’m trying to get at. Economies can borrow demand for a while, but only productivity-driven investment compounds into durable jobs. Capex is where the future shows up first. Question is will it turn into jobs.
Sharp framing on the independence earned through competence idea. The plot armor line cuts through alot of Fed mystique, its basically saying credibility comes from results not from asserting authority. Watching capex breadth vs narrow finacial gains will be the real tell here, probably more honest than any policy statement.
I’ll choose America every time…. But I
change Investments when I trust good advice.
Thanks for yours.
Same here—I’ll choose America every time. But I try not to get greedy. Markets can run higher, but after these upside moves it feels like a moment to trim risk and protect the base.
For perspective, the market had 3 standard-deviation upside move in the past month or so. I am reducing exposure, banking some gains, and keeping dry powder for when momentum flips.