Should Fed Chair Powell get fired?
The Federal Reserve Chair position is one of the most important positions impacting the US and Global economies. Based purely on its importance, I believe the position should be subject to termination.
I do not believe posturing to fire Powell based on spending too much money to renovate the Federal Reserve building is justified.
Looking at Powell’s track record, he has not been the most effective (correct) Fed Chair in my days. “Inflation, hotter for longer” was a huge mistake impacting every one of us. There were other missteps in late 2018 and during Covid.
If Powell is replaced, the Fed’s vote on interest rates will not simply change. There are other members who vote, and the chair is just one vote. I do not see any benefit to replacing Powell prior to the end of his tenure in May 2026.
If interest rates are lowered by 3%, as President Trump is calling for, yes very short-term rates would most likely fall. However, longer-term rates of 10 plus years could increase. The perception that borrowing costs will be lower could ignite an increasing inflation concern. The cheaper $ is to borrow, the more $ is typically spent.
Whether President Trump finds a way to fire Powell now or replaces him next year, the replacement will certainly be very dovish; meaning one that believes lower rates will be justified.
Trump’s best political move would be to keep Powell in place. He will then have someone to blame if the economy slows too quickly or if inflation moves hotter because of the tariff policies.
Perhaps we should reconsider how the Fed Chair and other members are appointed and what would be a beneficial method of holding members accountable for the decisions.
Profits and Markets
Last week marked the kickoff of corporate profit reports. According to the Wall Street Journal, Citi, Wells Fargo, Bank of America, Goldman Sachs, Netflix, AMEX, 3M and Johnson and Johnson all exceeded expectations.
This week, the number of companies reporting accelerates. We’ll hear over 100 S&P 500 companies report including Tesla, Coca-Cola, Chipotle, Alphabet, IBM, Verizon, Chubb, General Motors, DR Horton, and more.
Even with a solid start to profit season, the market was tame last week with the Dow down slightly (.21%), the S&P 500 up .50%, the Nasdaq uo 1.46% and the Russell 2000 up .22%.
Information Technology led the sectors, up 2.09%. Healthcare and Energy were the detractors, off (2.50%) and (4.29%) respectively.
Over the pond foreign stocks retreated (.71%), while emerging market stocks gained 1.73%.
So far in 2025, foreign stocks are leading the US. Much debate is now taking place about positioning for the remainer of 2025. More domestic investors are diversifying their allocations with investments outside the US.
Bond Market
The 10-year US Treasury ended last week yielding 4.42%, remaining range-bound around 4.5%. The 30-year bond has been flirting to surpass 5%, however ended the week yielding 4.991%. Our 2-Year yields 3.871%.
Fairly calm, despite the economic debates and uncertainties.
Rates staying range-bound is what the Doctor continues to order!
Key Financial Data Updated
Changes to our tax code have now been added to our valuable Key Financial Data Handout. As always you can find this handout on our website. To download a copy Click Here .
As always, thank you for reading. Feel free to share our weekly retirement blog with friends, family, and colleagues.
All data sourced from Wall Street Journal, July 20th , 2025.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested directly.
