Priyanka Tiwari
Share
Suspense crime, Digital Desk : During the latest meeting with prominent bond investors and hedge fund managers, Stephen Miran, chair of the Council of Economic Advisers in the term of Donald Trump, faced major backlash. This meeting that included estate visitors was conducted in the Eisenhower Executive Office Building, and was meant to soothe investor worries after a significant selloff in US government bonds amid new trade tariffs in early April, as per Financial Times.
Closed door sessions had attendees from financial firms like BlackRock, Citadel, Tudor, PGIM, and Balyasny. As per available information, participants thought that Miran’s responses during the meeting on the economic impacts of the tariffs were very unsatisfactory, with some labeling them “incoherent” and him thoroughly appearing “out of his depth.”
Economic Policy Indeterminacy Amplifies Concern for Investors
“Some members,” as noted by a participant, “will brush off his comments as out of touch with reality everywhere seeing as how unreservedly uninformed the speakers were.” At the same time, another highlight came in how the administration’s wider tax and deregulation plan was considered more favorably. With that, it is clear that the reaction from many investors was concerned given he did not provide a straightforward answer detailing the ramifications of lthe actions on the mmarket.
The meeting coincided with the spring meetings of the IMF, while this session was set up with the support of Citigroup which did not respond to the journalists requests.
Markets React to Tariff Proposals and Mixed Messaging
The stock and bond markets were rattled as President Trump announced broad retaliatory tariffs on April 2. Yields on 10-year US Treasuries reached 4.59% by April 11, and began to decrease to 4.17% on April 29 after the White House announced a 90-day pause on tariffs.
In opposition to Miran’s strategy, Treasury Secretary Scott Bessent indicated some agreement later in the day regarding the US-China trade dialogues and was able to cool the markets during a separate meeting, suggesting some discussions were progressing. However, Miran clarified that tariffs would not impose greater burdens on consumers than foreign exporters, emphasizing the nature of domestic revenue.
Currency Comments Exacerbate Investor Concern
Skepticism was amplified given Miran’s earlier writings, notably a note from 2024 entitled “Mar-a-Lago Accord.” In this document he suggested using US military and spending power to dictate terms of trade and currency to weaken the dollar and compel foreign bondholders to finance America’s defense expenditures.
Miran did not restate the proposal, but deemed global currency markets “distorted” while advocating for exporting nations to either pay tariffs or contribute to the US Treasury directly. This was during a speech at the Hudson Institute.
Such statements have put bond investors on edge, as they fear the language used could undermine faith in US Treasuries and the dollar, which had been considered dependable pillars of the world’s economy.
Miran Retreats From Previous Positions
Miran retreating from prior stances hints a softer line in later gatherings says an informant, confirming a more reserved approach in later meetings. One informant noted that this change was a ‘full-scale retreat.’
There is no decisiveness when it comes to policies, and the concern regarding the guiding principles behind economic policies remains too strong, persuasively dominating sentiments.
Read More: Putin Assures Modi of Continued Oil Supply Defying US Pressure on Energy Trade
