While President Trump is unable to make the Federal Reserve cut interest rates, his influence over the central bank is set to increase.
Now Fed Governor Adriana Coogler announced her resignation, giving Trump an opening to appoint an official to the board.
Trump reacted to Coogler's resignation on social media, saying that Powell should also call it quits.
Now, separately this week, set to be a big week for AI and tariffs.
New tariffs are set to take effect on Thursday while the US is hoping to impress allies on AI capabilities at this week's APEC meeting.
Well, joining me this morning is Patrick L.
Young, chairman and founder of Exchange Invests.
Patrick, good morning.
Thank you so much for joining us.
Well, first and foremost, Federal Reserve Governor Kugler retiring.
So is the Fed board shifting amid pressure from Trump here?
Clearly Trump now has the whip hand in certain senses because he can replace an an appointee in place of Ms.
Kugler and therefore he can obviously get someone who he thinks is more appropriate.
Is that going to be a Trojan horse?
This is not common in Fed Reserve history, but he could pick someone that he believes is going to be his choice as chairman who would obviously be able to agitate.
From the inside against Fed Chairman Powell, but in any which way you look at it, obviously Fed Chairman Powell is under greater pressure than ever.
Trump, as we know, is kind of stubborn, unrelenting might be the polite way to put it.
When he wants a deal, he's going to continue to push for it come what may, and Kugler's resignation has only played into that hand.
And Patrick, the APEC meeting is taking place this week and this could be a crucial diplomatic test for the Trump administration, which is seeking to rally allies around US led AI standards as well as export controls to prevent them from turning to Chinese tech.
So what are you watching for here when it comes to the AI race between America and China?
Isn't this fascinating, Rey?
I mean what we've got here is I was watching a video last week.
It was fascinating.
It was the Anglo-French Concorde being sold to the Shah of Iran.
Unfortunately, he never quite survived in office long enough to take delivery of his orders, but you know it has the same feeling this whole conference.
I mean, APEC, you've got this amazing US delegation.
They're going to go out there and they're going to sell American AI because American AI is the better model than Chinese AI.
It's quite a lot of trade mixed with soft power diplomacy.
And I suppose that really is the epicenter of what Trump is all about.
What's going to be fascinating is to see how will the reaction go, and I would expect because it's APEC, we're going to get a lot of muted interest.
People are not going to want to upset the USA, but at the same time they're not going to entirely ignore what's happening in China because AI is just moving so quickly at the moment in terms of development.
But it'll be interesting to see the Stars and Stripes sales team out there at the APEC meeting.
Yeah, that is something that we're definitely keeping our eyes on this week.
And another date that we're watching this week is August 7, that is the reciprocal tariff rate date.
So what does this new date mean and how do you think it will impact markets?
Well, look, markets are in the business of pricing things in in advance, so if they don't get huge shocks between now and August 7th, they're not going to be particularly surprised.
I think that's going to be good.
There could be, on the other hand, some sort of break which might be good news because look at what Trump's done.
I mean, it's a very ambitious schedule.
Still, everybody said his Trump regime, his tariff regime was never going to work.
Look where We are now in a totally different world of tariffs to where we were at the start of this year.
At the same time, Trump is still negotiating, arguing, bickering with not just Canada but most importantly, China and India.
China seems to be bewildered.
India is being somewhat stubborn, but somewhere therein there is the opportunity to break down a mega deal if we go forward, so it could.
If we get a surprise, and it's really only a 12% possibility that we see a deal with, say, for example, India taking place which could revolutionize the market because I think people would look at that very bullishly.
But what's going to happen in the meantime?
We know what the numbers are, we know what the tariffs are.
People seem to be thinking, gosh, this is the new normal, and in that case it shouldn't be bad for the market.
And finally, Patrick, before I let you go, let's take a look at CFTC nominee Brian Quintez, who is under fire after emails surfaced that could point to a potential conflict of interest.
Now Quintes is on the board of Calci, a predictions platform which the CFTC oversees, and crypto advocates like Gemini's Tyler Winklevoss isn't too enthusiastic about Quintess's nomination.
So can you quickly take us through this?
Here we are.
We've got a telenovela, Remy, genuinely happening in Washington DC.
There's a couple of things that just don't make sense here.
Yes, possibly Quintet has asked some questions that seem quite strange.
True.
Tyler Winklevoss has decided that Quinte is not really the sort of person he wants, even though Quintet is coming from A16Z, 1 of the biggest.
Acolytes for the crypto revolution, but at the same time, I will leave you with one thought.
How on earth did somebody in Washington DC get a Freedom of Information request to work in the course of a fortnight?
That's a 2 month and 8 month prediction market, although I don't see it listed on Calci right now.
OK, Patrick, always great talking to you.
Thank you so much for joining us on this Monday morning as we kick off a new trading week.
