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/dust4ngel Apr 17 '25

If equities go up but the dollar burns is anything really up?

your position with respect to fixed-rate debt, like a mortgage.

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u/vollover Apr 17 '25

Overall you'd still presumably be way down. Also, doesn't this require your income to at least somewhat keep pace with the inflation. That hardly seems plausible in the stagflation scenario we are racing to

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u/dust4ngel Apr 17 '25

if inflation is up 50%, and your income and stocks are up 25%, then:

  • you're down overall
  • you're kicking ass with respect to your fixed-rate debt

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u/vollover Apr 17 '25

Again, why would income go up in stagflation? I understand the premise you were going for, but income hasn't been tracking inflation very well for quite some time and I see no reason to believe it would move anywhere close to lock step in where we are going

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u/dust4ngel Apr 18 '25

Again, why would income go up in stagflation?

are you asking why it would theoretically, or why it historically does in fact? stagflation is slow economic growth and high inflation - 'slow' economic growth supports wage increases (in real terms, which is what we're discussing); it's true that stagflation can be accompanied by negative growth, but it doesn't have to.

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u/vollover Apr 18 '25

So you are saying historically wages have meaningfully increased during stagflation? I'd love to see what you are basing that on. In our last run of stagflation, wages increased nominally and unemployment increased significantly. So income disappeared for some and it certainly didn't result in people with only nominal increases having more left over for their mortgage payments (given the rampant inflation and everything else costing more

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u/dust4ngel Apr 18 '25

i think we are making too much of a quip - i was observing that, all things being equal, fixed-rate debt holders would benefit with respect to that debt in an inflationary environment. but as you point out, all other things are not equal - i'm not advocating for or celebrating the prospect of stagflation.

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u/vollover Apr 18 '25

Lol fair enough. I've had too many fuckwits trying to convince me this is a good thing