What we’re reading (4/17)
“Trump Again Calls For Fed To Cut Rates, Says Powell’s ‘Termination Cannot Come Fast Enough’” (CNBC). “A senior White House official told CNBC that the post should not be seen as a threat to fire Powell, but rather as a reinstatement of Trump’s frustrations with the Fed chief. However, Trump doubled down on his post later in the day, telling reporters: ‘I don’t think he’s doing the job. He’s too late, always too late … Slow, and 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.’ Trump also ignored multiple follow-up questions on whether he was trying to remove Powell.”
“Private Equity World Engulfed By Perfect Storm” (Wall Street Journal). “One of Wall Street’s most consistent profit engines is close to breaking down. Even before President Trump’s tariff chaos, buyout firms had been struggling to sell their portfolio companies and return money to anxious investors. Now recession fears and market turmoil have brought dealmaking to a near standstill…The longer the deal logjam lasts, the harder it will be for firms to hand money back to clients such as pensions and endowments. The amount of unrealized value the funds owe their investors has hit record levels, according to an analysis by credit-ratings firm Moody’s Ratings. That makes it tougher for the firms to raise new funds.”
“Moody’s Boosts Default Forecasts As Global Trade War Heats Up” (Bloomberg). “The credit-grading firm said it now sees the default rate for speculative-grade companies reaching 3.1% by the end of the year, compared with its prior expectation of 2.5%. If that forecast materializes, it would still amount to a decline in the default rate from the year prior, but Moody’s says it wouldn’t take a major negative shock for the rate to rise instead, possibly to as high as 6%.”
“Why Trump Will Lose His Trade War” (Paul Krugman). “The overall point is that even relatively sophisticated Trumpers like Bessent are still thinking in terms of Chinese access to the markets of the United States and our imagined trade war allies, when the real issue now is whether China can strangle the U.S. economy by disrupting our supply chains.”
“Why Value Investors Are Looking At Japan, Korea, And Brazil” (Institutional Investor). “In speaking this week to Dave Iben, portfolio manager at Kopernik Global Investors, who was also present at the event, the implication was that this is in fact feeding time at the value investor zoo. While the U.S. has seen sharp decreases, it remains expensive, he believes and because the shocks are being felt around the world there are in fact increased opportunities to buy companies that have been identified as undervalued elsewhere.”
