Good morning. Major U.S. markets … little changed … are treading water so far today as investors tiptoe towards the next FOMC meeting which starts exactly three weeks from today. Even with this date being so far away certainly doesn’t mean there is any relaxation for the Fed … as governors are no-doubt looking around wondering just what the makeup of our “central bank” will be in the future. And this is a big thing. A very big thing. One of the members of the board of governors, Lisa Cook, is accused of claiming two main residences on paperwork filed with mortgage companies four years ago, before she became a Fed member, and also not properly reporting rental income. The ramifications are meaningful in that one school of thought is that with the upcoming replacement of Chair Jay Powell in May (or sooner) and the recent resignation of Fed member Alicia Kugler … positions will already be filled with those seen as the President’s rate-cut “loyalists” … which in some eyes threatens the important independence of the Fed. One more replacement could very well concern financial markets … which do count on the Fed’s (supposed) decisions made without political agendas by those decision-makers. Because it is never ending … something like a Who tour … tariffs are back in the news as the President is warning China not to curtail the exports of magnets to the U.S., telling a room full of reporters (according to CNBC): “They have to give us magnets, if they don’t give us magnets, then we have to charge them 200% tariffs or something.” But therein lies a potential problem. Let’s say China produces a limited supply of magnets (or some other U.S. need). If, after other tariffs are applied, China realizes they would get more profit by selling their magnets elsewhere or keeping them for use in their fast-growing EV manufacturing industry … should they? Can a country be forced to supply another, even if profits are reduced? We might soon find out. It is interesting to walk into a store selling mattresses and see a customer just lie down on one to try it out. This is, of course, expected … as no one wants to make a major purchase without making a more informed decision … as those who have taken a car for a test drive are well aware. There, however, is a new concept in town … per last story below … as people are living in a home for day or so before making the final commitment to buy. This is intriguing … and takes a lot of trust … but certainly can cut down on the “buyer’s remorse” that some face when purchasing a new home. That about wraps it up for today as I need to run out to the store. I don’t want to admit how badly my golf game has become … … but I need to get my ball retriever regripped. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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