Sameer Shah

Today, it was reported that DOJ has launched a criminal investigation into Fed Chair Powell.
The reason is Powell's testimony regarding a multi-billion dollar renovation of the Fed’s headquarters.
But Powell said that it is not about construction but a political pressure to force him into cutting rates.
And this is a massive thing, as the Fed is supposed to be independent.
It cuts or raises rates based on inflation, jobs, and financial stability, not based on who is in power.
In 2020, the Fed cut rates because the economy was collapsing.
In 2022, it hiked rates because inflation was exploding.
That is how a central bank should work, but President Trump wants it the other way.
He has repeatedly called for low interest rates, and Powell isn't comfortable doing it.
This is why Trump is interviewing several people for the Fed Chair job.
He wants someone at the Fed who will ease monetary policy, given it's a midterm election year.
And it's highly likely that Trump will get what he wants, but there are implications to it.
Short-term Implication:
Lower rates will be great for markets, as it'll pump stocks, Bitcoin, and alts.
It's also possible that the Fed engages in aggressive liquidity injection, which could start a rally similar to the last cycle.
Mid to Long-term Implications:
After forced easing, inflation spikes and people start losing trust in currency.
Several large economies went to zero as they did too much easing.
Even the US has experienced it to some extent.
In the 1970s, political pressure pushed the Fed towards easing.
By the 80s, US inflation spiked to almost 14%, and the Fed had to raise rates to 20% to combat the inflation.
During this timeframe, stocks were absolutely crushed, and it was a lost decade.
And something similar could happen this time too, but the implications would be worse.
Forcing Fed to ease policy will not only spike inflation but could also result in the dollar losing its reserve status.
The reason people hold dollars is because they think Fed acts based on data and not politics.
If this changes, a massive amount of liquidity will flow from dollar into safe-heaven assets.
Dollar will lose its reserve currency status, and the entire fiat scam will probably be over.
#TrumpVsPowell