To The Moon

Trump announced on his social media platform that he was dismissing current Federal Reserve Governor Lisa Cook, declaring it “effective immediately.”

The move sent shockwaves through Wall Street. U.S. stock index futures fell sharply, while safe-haven assets such as gold and the Japanese yen surged. The market’s immediate reaction was not just fear of a single event, but a deeper reflection of investor concerns over the independence of the Federal Reserve — the very core of the U.S. financial system.

So where does the market go from here — long gold and short risk assets?

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1. @vc888:

Key Points:

As initially expected, sticky unemployment increases the odds of near-term rate cuts. I believe the stickiness is due to AI adoption, pressuring new hires in the services sector.

On the risk side, I admit I am not particularly excited about the latest economic data, confirming that tariffs are mostly passed through to consumers.

After the Jackson Hole remarks, I see an improvement in sentiment, with the 2-year and 10-year yields both pointing toward a near-term rate cut.

I reiterate my strong buy rating, and I expect a breakout above $6,500 on the S&P 500 in the coming weeks.

2. @Lanceljx:

Key Points:

Market Reaction & Structural Concerns

1. Market Response

President Trump’s announcement—via his social media platform—of the “immediate” dismissal of Federal Reserve Governor Lisa Cook triggered a notable market response:

Equity markets: U.S. stock index futures edged lower.

Safe-haven flows: Gold and the Japanese yen experienced strength.

Fixed income: The yield curve steepened, with longer-term Treasury yields rising, reflecting increased risk and political uncertainty.

2. Legal and Institutional Precedent

While the President can remove a Fed governor “for cause,” this standard is legally vague and has never before been tested in this context. Lisa Cook plans to challenge the dismissal in court.

If upheld, this unprecedented action could represent a seismic shift in central bank independence and establishment norms.

3. Long-Term Risks

Analysts warn this move risks undermining confidence in the Federal Reserve’s autonomy, potentially increasing inflation expectations and complicating monetary policy.

The Fed’s credibility—anchored in institutional independence—is widely viewed as a cornerstone of stable inflation control.

Summary & Outlook

Immediate Market Effect: The response, while real, has been moderate. Markets appeared quick to recalibrate without panic.

Institutional Integrity at Risk: The legal challenge ahead will shape the boundaries of presidential authority over the Fed—a precedent with profound implications.

Further Monetary Policy Impacts: Should this dismissal succeed legally, it may accelerate political influence over rate decisions—possibly tilting towards faster rate cuts despite inflation objectives.

3. @TwoDeMoon:

Key Points:

It matters what he said before, but not so much anymore. Markets are overreacting. Trump administration will do all it can to bring down the Fed rates.

Did anyone notice Trump has bought 100mil USD bond recently?

Well now you know why he is so anxious and angry with the Fed chair calling him stupid and all.

Buy the dip if another rate cut is skipped, or any bad news. You know Trump has meat in the market, he wants it to go up personally.

4. @Isleigh:

Key Points:

Markets faced a rare triple catalyst this week:

1. Powell's dovish tilt → September rate cut odds climbed, easing yields.

2. Trump's Fed shock → firing Lisa Cook raised credibility risks for central bank independence.

3. SPY Rebalancing → passive flows shifting weights across tech, energy, and financials, amplifying volatility at key support levels.

🔎 Macro Impact

Fed Credibility Risk: Political interference could keep investors cautious.

Safe-Haven Flows: Gold, yen, Treasuries drawing bids as hedges.

ETF Flows: The quarterly rebalance in SPY is creating churn in mega-cap tech names (AAPL, MSFT, NVDA), intensifying intraday swings.

📊 Predictions (Near-Term)

$Invesco QQQ(QQQ)$ (Nasdaq 100 ETF ~$573)

Support ~$560; risk-off headline could test $550.

Dovish Fed tailwind → rebound target $585.

SPY (S&P 500 ETF ~$645)

Rebalance flows mean chop between $635–655 short-term.

A clean break below $635 could trigger stops down to $620.

If Fed cut narrative dominates, expect SPY to claw back to $660+.

Gold (XAU)

Strong safe-haven bid could carry it to $2,550–2,600 while Fed uncertainty lingers.

5. @Spiders:

Key Points:

I bought $iShares 10-20 Year Treasury Bond ETF(TLH)$ because there's a potential for a Fed rate cut in September. Following Powell's recent speech, traders may see an increased likelihood of a rate cut, which would be favorable for TLH.

Questions for you:

So where does the market go from here — long gold and short risk assets?

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⏰Duration

• 3 Sep (24pm EDT)