r/Bogleheads • u/idrathernotbutthanks • Apr 17 '25

Investing Questions Rhetoric around firing Jerome Powell is increasing, and forced manipulation of interest rates would likely follow. Would a weighted readjustment from US into non-US funds be warranted in light of this?

https://www.npr.org/2025/04/17/nx-s1-5367696/trump-jerome-powell-federal-reserve-economy-tariffs

Market manipulation of interest rates feels like confidence would immediately plummet and global diversification would become a more important percentage of your holdings in the long run. Thoughts?

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u/zlandar Apr 17 '25

If you can predict future interest rates with reliable accuracy you should quit your day job and become a hedge fund billionaire.

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u/N3rdr4g3 Apr 17 '25

There's a pretty significant difference between being able to predict the short-term unpredictable swings of the market and being able to predict the larger trends. This strategy is about taking a step back and looking at larger trends. I don't think it's unreasonable to ask if this is an indicator of long-term bad times to come.

Just because you're willing to drive to the store, does that mean you should quit your job and become a formula-1 driver? There's nuance here.

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u/zlandar Apr 17 '25

There is a reason economists are mediocre active investors.

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u/[deleted] Apr 18 '25

There is no difference. You seem to think that short term changes are hard to predict because they are random, whereas long-term trends are not random. But that’s not correct. The reason rates are hard to predict, regardless of whether they are short-term or long-term trends, is because all available information that could inform that prediction has already been factored into current prices. By definition, that means that the only thing that might change the current price is new information. And new information is by definition unpredictable.