Good morning, traders,
Just when you thought President Trump’s campaign against Fed Chair Jerome Powell couldn’t possibly get any crazier or more outlandish, it could … and it did.
As of this writing, Trump was planning a very public visit to the Federal Reserve headquarters Thursday afternoon — and he wasn’t going alone.
Instead, the president planned to show up with a posse of political allies, and the message was loud and clear: Pressure on Powell is now at stratospheric levels.
At the heart of this latest move is a controversial $2.5 billion renovation of the Fed’s headquarters, which sits less than a mile from the White House on the National Mall.
Trump’s been hammering Powell on monetary policy for years — and especially with repeated calls for rate cuts in recent months — but the eye-popping renovation budget has provided a perfect excuse to heap on even more vitriol.
To top it off, one of Trump’s close allies has filed a lawsuit claiming the Fed is violating a 1976 law by holding policy meetings behind closed doors.
This, of course, is in advance of next week’s Fed/FOMC meeting on July 29 and 30.
So while the market’s been hyperfocused on earnings season and the next rate move, a bigger, bolder game is being played.
Trump’s long-standing feud with the Fed is nothing new. But physically walking into their house?
That’s theater. And markets don’t usually like theater — especially the kind that hints at political pressure on central bank independence.
Here’s what it means for traders, and what else bears watching too.
First, the Bigger Picture
Now, let’s pull back for a second and look at the broader backdrop.
Alphabet, Google’s parent company, just posted better-than-expected earnings per share on Wednesday. That lit a fire under the tech-heavy Nasdaq, giving bulls something real to chew on amid all the noise.
The Street was expecting around $2.18 per share, but Alphabet delivered $2.31, with strong growth in its cloud division and YouTube advertising.
At the same time, the latest initial jobless claims dipped by 4,000 — hitting 217,000 for the week ended July 19.
It’s a small move, but it reinforces the broader theme: The jobs market is softening, but not in a way that screams danger.
The Fed’s been waiting for labor to show some cracks — and now it’s happening in slow motion.
But a still-healthy job market doesn’t exactly support the argument for rate cuts.
Why It Matters to You
So, what does all of this mean for traders?
First off, don’t ignore the optics.
When a president of the United States is marching to the Fed’s front door with TV cameras and legal threats in tow, that’s not noise — it’s a potential signal.
Whether Powell caves to the pressure is one thing.
But the perception of an embattled Fed could affect how markets interpret future rate decisions.
If the Fed pivots dovish next week, bulls will wonder if it’s about economics … or politics.
Second, Alphabet’s earnings show that the tech titans still have plenty of gas in the tank.
That’s good for sentiment, and for those looking to ride momentum in the short term.
But don’t forget, a few big beats from the Magnificent Seven can’t paper over weakness in the broader economy forever.
You still need to be selective and fast.
Third, those jobless claims tell us the Fed might still have a little breathing room.
The market’s pricing in a cut later this year. But if Powell starts cutting with Trump breathing down his neck, expect questions from all sides — especially if inflation stays sticky.
So here’s how I’m playing it: I’m looking for high-quality trades with asymmetric payoff. That means buying cheap calls on strong names after pullbacks, and staying short-term focused while Washington kicks up dust.
And I’m not betting on any one outcome because this market isn’t driven by a single story.
It’s a cocktail of Fed uncertainty, political pressure, AI hype, and earnings rotation. The trick is knowing when to fade the drama and when to trade around it.
The latest Fed craziness is worth watching closely. Not because it changes the next rate decision on its own but because it might shift how Powell communicates it.
And in this environment, sometimes tone moves the market more than action.
Stay street smart,
Jeff Zananiri
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