Trump's 'bombardment' of the Federal Reserve and his intervention remarks often trigger market concerns about volatility in U.S. assets, uncontrolled inflation, and the independence of the Federal Reserve. However, historical market trends and recent market reactions indicate that there is no need to fall into panic. By closely monitoring the dollar, 30-year U.S. Treasury yield, and the three core signals from the U.S. stock market, one can accurately assess risks and grasp market rhythms.
From the perspective of signal logic, the three signals each emphasize different aspects while corroborating each other, forming a complete risk observation system. The dollar acts as a 'barometer' of foreign investors' confidence in the U.S.; if Trump's remarks prompt foreign capital to question the stability of U.S. policies, foreign investment will reduce exposure to dollar assets, leading to a weaker dollar, which is the most direct emotional feedback. The 30-year U.S. Treasury yield focuses on inflation expectations and long-term prospects; if investors worry that intervention undermines the Federal Reserve's ability to combat inflation or are bearish on the long-term U.S. economy, they will sell long-term U.S. Treasuries, pushing yields higher, especially when yields rise sharply, it is necessary to be alert to rising inflation and rate hike expectations; U.S. stocks serve as the most direct 'crisis alarm', as the most closely watched assets, investor dissatisfaction with policy risks often directly translates into stock market sell-offs, but their reverse performance can also release signals that 'risks are controllable.'
From recent market practices, these three core signals have provided clear guidance. When Trump's related remarks stirred up on Tuesday, the S&P 500 index opened lower but slightly rose, not repeating the panic seen in April when the Dow Jones plunged 972 points after the 'bombardment of Powell'; the 30-year U.S. Treasury yield rose only 5 basis points, far below the 10 basis points on April 21; the dollar also showed no significant signs of weakening. The simultaneous signals conveyed that 'the market is not worried', based on the logic that investors either judged that 'firing Federal Reserve officials' is unlikely to materialize or believed that even if it did, the actual impact on the independence of the Federal Reserve would be limited, thus no excessive reaction is needed.
If Trump continues to pressure the Federal Reserve in the future, it is still necessary to use the three major signals as core observation anchors. A single signal's fluctuation need not cause anxiety, but one should be alert to the three 'simultaneously flashing red lights', namely significant weakening of the dollar, a sharp increase in the 30-year U.S. Treasury yield, and a substantial sell-off in U.S. stocks occurring at the same time. If this scenario arises, it indicates that a consensus has formed regarding market concerns over the stability of U.S. policies, the ability to control inflation, and the independence of the Federal Reserve, necessitating timely adjustments in asset allocation to mitigate risks; conversely, if signals diverge or remain stable, one can maintain rationality and avoid being swayed by single remarks when making investment decisions.
Ultimately, Trump's 'bombardment' of the Federal Reserve is more of a short-term emotional disturbance rather than a 'black swan' that inevitably triggers a market crisis. Using the three major market signals as an objective basis, rather than being swayed by remarks, is the core strategy for responding to such risks.