Lone Candle
Champion of Truth
Bessent and Trump are going to war with the bond market, but the current interest rate is a bill to be paid, not an enemy to be fought.
https://www.youtube.com/watch?v=wZaYyNAXHK4
The post-covid inflation was caused roughly 2/3s by supply issues and 1/3 by demand.
The Fed recognizing that the drivers were temporary, meaning they did not need to raise interest rates to crushing levels, and making clear that they were sticking to a specific interest rate target, helped create the soft landing, although the plane didn’t 100% land and instead stayed hovering above the ground. The landing was likely prevented by Trump-driven shocks.
https://www.youtube.com/watch?v=Luudo28Mx5M
“There is no simple relation between government spending and inflation”
https://www.youtube.com/watch?v=346rx5Mc9Ng
“Warsh has been critical of the Fed in recent months but is seen as a conventional choice for the role. Warsh has a background in the Bush administration, and he was appointed by former President George W. Bush as Fed governor, serving in that role during the financial crisis from 2006 until 2011.
Although he is considered a relatively safe pick, Warsh faces an uncertain path ahead in the Senate due to potential Republican opposition. North Carolina Sen. Thom Tillis, whose vote is needed to advance the nomination out of the Senate Banking Committee, reiterated that he would oppose any Fed chair pick until the Department of Justice’s investigation into Fed Chair Powell is resolved.”
https://finance.yahoo.com/news/live/federal-reserve-chair-nomination-live-wall-street-reacts-to-trumps-fed-pick-kevin-warsh-as-hurdles-remain-in-the-senate-182518657.html
Trump called his Department of Justice lawyers weak and told them they needed to get on his retribution campaign. After this meeting, the lawyers went after the Fed chairman, Jerome Powell.
Unusually, some Republican Congressmen are breaking with Trump and criticizing this move.
https://www.youtube.com/watch?v=owKy9QrEWZA
“In an economy, prices are signals. Interest rates are the price of money, and they give the authorities a clue about how to manage the federal budget. If interest rates are too high, the market is telling the government it is spending too much. If interest rates are too low (like they were a few years ago), the markets are telling the government that it is spending too little (if such a thing is possible).
Right now, the government is spending too much. If the central bank were to cap the interest rate, its usefulness as a price signal would disappear. The government can borrow an unlimited amount of money with no immediate consequences but with one big long-term consequence: inflation.”
https://reason.com/2026/01/06/is-this-the-end-of-american-capitalism/
Jerome Powell says the Gen Z hiring nightmare is real: ‘Kids coming out of college…are having a hard time finding jobs’
https://www.yahoo.com/news/articles/jerome-powell-says-gen-z-212422015.html
Long term bond yields rose after the Fed cut. This is the bond market signaling to the Fed that the interest rate cut was not needed and that they have less confidence that the U.S. will remain solvent in the long term. We should watch and see if this signal maintains over the weeks to come.
https://www.youtube.com/watch?v=Yr6pBTKg1VY
“Inflation, as measured by the Fed’s preferred price index, remained at 2.6 percent in July, the most recent month in which data are available. The Fed’s target is 2 percent. Moreover, in August, the consumer price index, which the Bureau of Labor Statistics uses to measure inflation, increased by 0.4 percent—the greatest monthly increase in inflation since January…
The FOMC acknowledged in its own announcement that “inflation has moved up and remains somewhat elevated” while the unemployment rate “remains low.” Increasing the fed funds rate is one of the Fed’s primary tools to combat inflationary pressures; lowering it is the opposite of what the Fed should do if it’s seriously concerned about inflation. Apparently, it’s not.”
https://reason.com/2025/09/18/the-federal-reserve-cuts-rates-with-inflation-still-hot-is-political-pressure-winning/
“”Does ‘for cause’ require something more substantial than a mere allegation of wrongdoing, such as a formal charge, or a conviction, or even something else?” asks Reason’s Damon Root in a great piece on the precedent the Supreme Court might lean on (Namely Humphrey’s Executor v. United States (1935) and Seila Law v. Consumer Financial Protection Bureau (2020)). “Here’s another question to ask: Is the mortgage fraud allegation that’s been leveled against Cook merely a pretext designed to cover the fact that Trump is actually firing Cook for illegal political reasons?””
https://reason.com/2025/08/29/trumps-fed-coup/