Powell at risk?
On Friday, Bloomberg reported that President Trump floated the idea of firing Fed Chair Jerome Powell many times. While Trump did appoint Powell, the Fed is an independent agency and some raise doubt if he has the legal authority to remove Powell. Trump's advisors warned that removal of Powell would have potentially devastating ripple effects across financial markets, undermining investors' confidence in the central bank's ability to shepherd the economy without political interference.
Mnuchin sparks fear instead of calm
This weekend, Treasury Secretary Steve Mnuchin tweeted that he called the CEOs of the nation's six largest banks to confirm “they have ample liquidity available for lending to consumer, business markets, and all other market operations.” He apparently did this to calm markets but instead raised questions that weren't even on investors' minds. Now we are left wondering why he is concerned about this issue.
These actions by leadership are concerning as they don't instill confidence that they are in control of the situation. With the economy still functioning and growing, one wonders how they will react when the recession actually arrives. Investors should be cautious and not overly aggressive with their savings at this time.