#PowellVsTrump Trump is waving a draft of Powell’s termination letter in front of lawmakers, and Wall Street is cruising.Stocks remain near record highs. The dollar and bond markets briefly jolted but recovered after Trump denied reports he was preparing to fire Powell.This seems to point to two possibilities:

Everything is a TACO trade now, and markets are convinced Trump will never cross the red line of tampering with the Fed’s independence.

The red line is more academic dogma than it is a law of finance.