The bond markets reacted negatively after Trump’s election victory, raising borrowing costs, particularly for mortgages, which could disappoint voters expecting improvement in housing affordability.
Trump's antagonistic record toward the Federal Reserve has made investors uneasy. His public criticism of Powell and reluctance to reconfirm him add to that uncertainty, complicating economic stability.
Trump needs to signal his support for Powell to calm the bond markets. By committing to let Powell lead until the end of his term, he could stabilize expectations.
The dynamics between Trump and the Federal Reserve reflect deep concerns among bond investors, underlining the significance of a harmonious relationship with the central bank during high inflation.
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