It All Points to the 'Mar-a-Lago Accord'
Trump versus the Fed chair... Why now?... What the numbers say... The story behind the scenes... Trump's next move...
He can't wait...
Today, markets woke up to an early-morning blast from President Donald Trump on Truth Social... and a takedown of Federal Reserve Chair Jerome Powell...
As my colleague Nick Koziol quipped to me (Corey McLaughlin) soon after, "Good morning, Mr. President."
I have a few things I need to note right away.
First, longtime readers know we've frequently called Powell "too late and wrong" in these pages over the years.
Most notably, the Fed responded slowly to pandemic-era inflation, leaving rates low for too long and fueling the problem. At other times in the past, it has kept rates unnecessarily high... stifling growth.
So we have no argument with Trump about the general comment of speed. That's a function of how the Fed works with its backward-looking data.
Second, while oil prices are lower and food inflation is down since the start of Trump's second term in the White House, the idea that "the USA is getting rich on tariffs" is an open question.
Trump has claimed the country is bringing in as much as $2 billion per day. U.S. Customs and Border Protection, which collects the duties, says it has averaged closer to $250 million per day so far. (All the while, the roughly $36 trillion federal deficit has been growing by roughly $8 billion each day.)
Now, with that out of the way, let's get into some more detail.
Why is Trump bringing this up now?...
Well, as we'll explain, something deeper is happening behind the scenes – something beyond a personal feud with Powell. But the trigger for this post appears to be the Fed chair's comments yesterday (which we reported on in last evening's Digest)...
"Tariffs are highly likely to generate at least a temporary rise in inflation," Powell said, but he added that "the inflationary effects could also be more persistent," depending on their size and scope.
But Powell also said growth could slow, too, and that the Fed's "dual mandate" goals (of stable prices and maximum employment) could end up "in tension." Tariffs are "likely to move us further away from our goals," he said, "probably for the balance of this year."
If that's the case, Powell said the central bank would have to consider which one to primarily address. (The Fed clearly doesn't believe in simply doing nothing.) Of inflation, he said a goal would be to make sure any short-term tariff-related price increases don't turn into a longer-term trend.
That sounds to me like a reason to expect higher interest rates for longer.
As Trump's Truth Social post referenced, the European Central Bank ("ECB") just pulled the trigger today on its seventh rate cut since the middle of 2023. This time, the ECB cut another 25 basis points off its rate, saying the "outlook for growth [in Europe] has deteriorated owing to rising trade tensions."
Here in the U.S., the Fed has been in "pause" mode in 2025, as central bankers have signaled concern about higher inflation since December. By the time of its pause, the Fed had lowered its benchmark lending rate by 100 basis points since the summer of 2024.
It's a familiar split screen if you recall the beginning of this most recent global rate-cutting cycle: Europe moved first, and the Fed hesitated as it remained concerned about high(er) inflation (and rightfully, given that the pace of price increases remained higher than normal in the years since the pandemic).
This afternoon, Trump continued his criticisms...
During a media event in the Oval Office with Italy's Prime Minister Giorgia Meloni, a reporter asked Trump about his message to Powell, who has previously insisted that the president lacks the legal authority to fire a Fed chair. Trump replied...
He'll leave. If I ask him to, he'll be out of there... I'm not happy with him. I let him know it, and if I want him out, he'll be out of there real fast, believe me.
He continued that Powell is "somebody that I've never been really fond of, actually," despite nominating him to replace Janet Yellen as Fed head back in 2017. Trump said today of Powell...
He's playing politics. Interest rates should be down now...
The Fed really owes it to the American people to get interest rates down. That's the only thing he's good for... I think at some point he will. He's going to have a lot of political pressure. You know, they are political also.
We expected this...
You might also recall Powell was also a foil of Trump during his first term. On November 7, two days after the election, we previewed precisely this kind of situation based on a Fed meeting and press conference that day...
Asked about reports that, "some of the president elect's advisers have suggested that you should resign" and "if he asked you to leave, would you go?" Powell answered directly.
"No," he said.
After Tuesday night's election, the palace intrigue with the Powell and Trump relationship (and that of monetary policy of the Fed and fiscal policy guided by the White House and Congress) is just starting again.
Last time around as president, Trump was critical of the Fed head − to put it mildly. Trump fired off roughly 100-plus Fed and Powell-related tweets, and stumped for lower interest rates, from 2016 to 2020. There's a case to be made that the nagging had an influence...
During this 2024 campaign, Trump suggested he should have more direct influence on Fed decisions. And in February, he said he wouldn't reappoint Powell to lead the Fed. A few months later, Trump softened that stance but not completely.
Powell's term as Fed chair isn't scheduled to end until May 2026, and he's supposed to have a seat on the Fed board until 2028.
But Trump's messages today suggest that he expects a "termination" of Powell as Fed chair sooner than later and his tenure might very well end ahead of schedule.
I also caught Powell making an interesting offhand comment yesterday during his speaking appearance that suggested he might be over the job soon anyway. "We're not removable except for cause. We serve very long terms — seemingly endless terms," Powell quipped.
He also said, "My first appearance as chair [was here at the Economic Club of Chicago] seven-and-a-half years ago. It's been an eventful seven years, putting it mildly. I keep waiting for the three months of calm. [It] never comes."
What's happening...
Several indicators show a U.S. economy that's cooling.
The pace of inflation is down from its 2022 highs – and the latest consumer price index ("CPI") report from Uncle Sam actually showed some signs of deflation. The CPI for March said inflation fell 0.1% compared with February and grew by 2.4% year over year.
Another independent measure of inflation, "Truflation," shows a U.S. annual inflation rate near 1.4% – below the Fed's 2% goal...
Meanwhile, although the labor market is still relatively tight, with the unemployment rate at 4.2% or lower since July 2024, the recently unemployed have not found new work quickly.
The Atlanta Fed's well-followed GDPNow model is estimating that first-quarter GDP growth will come in at negative 2.2%... and the government has suspiciously gone out of its way to highlight that the numbers would be better – essentially flat – if you just consider an "alternative model" that adjusts for gold imports.
That strangeness aside, as Trump rightly noted, oil prices are lower than they were in January. And that's a good thing for consumers. However, housing prices and mortgage rates remain stubbornly high (tough for homebuying), and the real estate market remains in a slumber.
The markets didn't love Powell's cautious tone about rate cuts yesterday...
While he was addressing the Economic Club, stocks hit intraday lows.
Today was a slightly up day for most major U.S. indexes. The exception was the Dow Jones Industrial Average, which was dragged down by a 22% crash in UnitedHealth (UNH) shares on a terrible earnings report tied to its Medicare business.
On interest-rate cuts, I suspect Powell is still gun-shy. After all, when the central bank lowered rates by 50 basis points in the fall, long-term bond yields rose strongly and nearly instantly as the credit markets prepared for higher inflation.
Suddenly, other Fed members were talking about the concern for reigniting 1970s-style inflation, which is a legitimate concern.
The federal-funds futures markets are currently pricing in two rate cuts by July and possibly three by September. But yesterday Powell seemed less serious about cutting rates and more concerned about a possible spike in inflation related to Trump's tariff policy.
Whether those are legitimate concerns or not, the issue we're interested in is that rate-cut expectations are baked into equity prices and risk assets across the board.
The longer Powell goes without suggesting more rate cuts are on the table, the greater the risk of more market volatility this year – and, from the looks of it, the more Trump will increase his criticism.
But here's the idea we want to leave you with today... Trump's post wasn't just an attack on Powell or reflective of his desire for higher stock prices.
If you look a bit deeper, you'll learn it hinted at a broader play: nothing short of Trump's desire for regime change in U.S. monetary policy.
And if you understand this, what we've been seeing and hearing lately – like gold surging to all-time highs and the Treasury market breaking down amid extreme volatility in stocks – makes a whole lot more sense.
It all points to the 'Mar-a-Lago Accord'...
Trump's aim at Powell... tariff policy... it has everything to do with a global "reset" that more and more folks on Wall Street are talking about each day.
They've dubbed it the "Mar-a-Lago Accord," referencing Trump's Florida residence and club. It's where he spends his weekends and hosted world and industry leaders between the time he was reelected to the White House and ahead of his inauguration in January.
This idea has gone viral in hedge-fund circles. Wall Street can't stop talking about it... and yet practically nobody on Main Street understands the story. We want to get you up to speed.
Trump is no doubt making bold, sweeping changes in Washington, and strange events are unfolding in the global financial system.
We've been reporting on many of the developments in the Digest the past few months, but still, too few Americans know what's going on... and even fewer know how to protect and grow their portfolios as the global financial system shifts beneath our feet.
That's why my friend and colleague Dan Ferris – Stansberry Research's longest-tenured analyst, your regular Friday Digest essayist, and my Stansberry Investor Hour co-host – recently sat down on camera to record this urgent message...
If you thought "Liberation Day" was the end of the stock market chaos, Dan tells you to brace yourself. As Trump's next move plays out, as much as 40% of your money could be wiped out in the next two years.
Dan says he was shocked when he realized how far-reaching this story could be, even as a skeptical 30-year stock market veteran who thought he'd seen it all.
When you see Dan's presentation about what's happening behind the scenes and what the "Mar-a-Lago Accord" really is, a lot of the confusing stories playing out in the news and the market chaos we've been seeing these days will suddenly make sense.
And so will the blueprint and specific recommendations Dan says you should follow to protect your wealth from the potential fallout... and to potentially make vast sums of money as this all plays out.
He lays out his full case... plus a detailed four-step plan for exactly what to do. (And it doesn't require shorting... options... or perfectly "timing the market.")
You can learn more from Dan now right here, and we suggest you do. He urges everyone to make the moves he's talking about by the end of this month, April 30.
(One note: Dan's Extreme Value and Stansberry Alliance members already received this new information earlier this week. If that's you, you can find it here, but feel free to check out the free video presentation as well.)
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A housekeeping note before we get to the mail. The U.S. markets and our offices will be closed tomorrow in observance of Good Friday. After this weekend's Masters Series, we'll pick things back up with the Digest on Monday. And you'll hear from Dan Ferris next Friday.
In today's mailbag, feedback on yesterday's edition... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Powell was every bit the grown up and gentleman at his recent address to the Economic Club. He is a goner..." – Subscriber Simon K.
"When y'all started posting some of Greg Diamond's Market Outlook for free a few years back, I started seeing volatility more as an opportunity to make money than to just stay remain on the sideline. So please, bring on the volatility.
"And please pass a 'Thank You' to Doc Eifrig for his Quarterly Retirement Trader recommendations. Trading has become so much easier for me!" – Subscriber Jose T.
All the best,
Corey McLaughlin with Nick Koziol
Baltimore, Maryland
April 17, 2025