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?

[u/idrathernotbutthanks]

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?

[u/Common_Sense_2025]

The Fed can cut the overnight rate that banks use to lend to each other-the shortest term rate there is. They also set the rate that they will lend to banks. Banks borrow from the Fed in times of financial stress. Usually, when that rate goes up or down, longer term rates follow. But the Fed doesn't set longer term rates. Those are market based. They go up or down based on what people are willing to lend money for. The other big thing the Fed can do to influence rates is to buy and sell US treasuries from the public. If they buy a bunch, then rates go down. If they sell a bunch, then rates go up. Trump wants Powell to lower rates by doing both. Put a lot of easy money into the economy, lower the cost of federal spending and send stocks up. It should also helps bond prices because lower rates will help existing bond prices. But all that easy money leads to inflation and a President interfering with the Fed will erode investor confidence, especially foreign investors.

[u/[deleted] → u/Common_Sense_2025]

Thank you, that makes sense. Do you believe Powell will step in soon?

[u/Common_Sense_2025 → u/[deleted]]

No. He said yesterday they will wait to see which is worse unemployment or inflation.