The Fed has not bought any government bonds onto its balance sheet in three years. They have been tightening for three years (reduced over $2 trillion of government bond holdings). No, they are not keeping rates artificially low (just ask the President). And there is abundant demand for federal debt, clearly.
~ David L. Bahnsen, April 24, 2025

If somebody could make any argument for how tariffs address fentanyl, I would be all ears. It is hard to believe that we would have led with increasing tariffs on Switzerland for chocolate and watches if we were really talking about fentanyl. Similar to various national security arguments, I would say that if that is our concern, I see no offset in getting paid on it. Because I care about the moral aspect, it makes the way this has all been handled so much more confusing.
~ David L. Bahnsen, April 24, 2025

The market cares if the President wants to fire Powell because:

a)It is blatantly illegal,
b) It is a frightening precedent that the President would set himself up as the sole arbiter of monetary policy, overtly politicizing and imperializing the process, not due to illegality or malfeasance but simply for not doing monetary policy the way the President wants it done (this is by far the market’s biggest concern – stripping the central bank of any pretense of independence and making it a rank political actor to serve at the whim of a political leader)
c) Powell was slow to raise rates after being at the zero bound for too long post-COVID. But markets hardly complained about that. In fact, Trump wouldn’t have either had he been President at the time.
d) Powell lowering rates by 100 bps from September through January of last year was one of the biggest no-brainers in history. Financial markets were a solid 100-200 basis points too tight, mortgages were over 7%, housing volume was frozen, and no one in their right mind thought inflation was going higher. To wait for 2% inflation to start lowering would be a complete misunderstanding of the very definition of monetary lags. Powell knew goods inflation was at 0%, and knew shelter inflation was skewed by faulty rent methodology. Had he not cut rates in September, we would be looking at a wave of CRE and corporate defaults for absolutely no monetary policy advantage. In my estimation, Powell has made dozens of mistakes as Fed chair, but lowering rates in the fall of 2024 was not even close to one of them.

~ David L. Bahnsen, April 23, 2025

First of all, because they have no intention of running any tariffs through Congress and actually legislating them into existence per Article I, Section 8, Clause 1 of the Constitution, they can’t even count the revenue towards an actual budget because it is as if it doesn’t exist. But then, of course, there may be some revenue collected in actuality, and that has to be offset (in actuality) against subsidies given to offset the negative impact. The tariffs as they stand are meant to put trade with China at zero, so the tariff revenue would be… zero. When you tax more of something, you get less of it, and therefore, expectations for revenue from tariffs to impact the budget deficit are wishful thinking.
~ David L. Bahnsen, April 23, 2025