"Both of these are under threat as a result of President Trump's escalating efforts to bring the Federal Reserve under his direct control, according to a new warning from investment bank Piper Sandler. "The US is moving away from free markets, limited government, and the rule of law at an astonishing pace," the bank writes, taking aim at a range of actors beyond the president to indict a complacent Congress and even markets themselves."
""We are watching the pillars of the long bull market being removed one by one," the bank warns, adding that the crisis goes far beyond Trump's unprecedented attempt to fire a Fed governor. Although it did not say so explicitly, the bank took aim at American markets' string of all-time highs, essentially warning that they will not ride to the rescue."
""We do not share the investor conceit that the markets regularly 'discipline' politicians," the bank notes, warning that "bond vigilantes" will not save America from the developing problem. It also argues that the crisis for the American economy goes far beyond the attempted firing of one Fed, or of central bank independence."
American exceptionalism traces back to Puritan 'city upon a hill' origins and was revived by Reagan and Thatcher through free-market policies. U.S. stock markets outperformed global peers markedly after the pandemic. Investment bank Piper Sandler warns that President Trump's escalating attempts to bring the Federal Reserve under direct political control, alongside a complacent Congress and market complacency, are eroding free markets, limited government, the rule of law, and central bank independence. The bank cautions that market highs and 'bond vigilantes' will not discipline politicians or rescue the economy, and that pillars of the long bull market are being removed.
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