Reuters’: Michael Landsberg: There’s an Overwhelming Disconnect Between Trump and the Fed

January 23, 2025

“There’s an overwhelming disconnect between what President Trump wants and what the Fed will likely do,” says Michael Landsberg, Chief Investment Officer at Landsberg Bennett Private Wealth Management, during his interview with Reuters. Landsberg joined Lisa Bernhard to discuss President Trump’s speech at the World Economic Forum in Davos, his calls for immediate rate cuts, tariff threats, and the potential impact of oil prices on inflation and global trade.

Landsberg addressed Trump’s demands for immediate rate reductions and his broader economic positions, highlighting potential disconnects between political and monetary objectives and their implications for markets and inflation.

Key Takeaways:

  1. Fed’s Stance vs. Trump’s Rate Cut Demands: Landsberg expressed doubt about the feasibility of Trump’s demands for immediate rate cuts. “Inflation has been rising for the last three months, and I expect it to keep rising for the next six. The Fed is boxed in and unlikely to deliver any cuts this year,” he stated. Landsberg emphasized that the Federal Reserve must balance inflation concerns against the potential risks of further stimulating the economy.
  2. Tariffs as a Negotiation Tactic: Regarding Trump’s threats of tariffs on EU goods and North American trade partners, Landsberg suggested the president is using tariffs to bring stakeholders to the table. “This is part of Trump’s strategy to address perceived economic imbalances. I don’t think 25% tariffs on Canada and Mexico are likely, but it’s more about getting them to help on issues like immigration,” he explained.
  3. Oil Prices and Inflationary Pressure: Landsberg discussed Trump’s request for Saudi Arabia and OPEC to lower oil prices, noting that current levels could exacerbate inflation. “If oil stays in the $78-$79 range, it will contribute to higher inflation. Getting prices closer to $70 per barrel would ease some of that pressure,” he said. However, Landsberg doubted whether OPEC would comply with such demands purely at Trump’s request, describing it as “likely a negotiating tactic.”
  4. Impact of Trump’s Policy Rhetoric: Trump’s remarks about blaming external forces, including Saudi Arabia, for the Russia-Ukraine war were also analyzed. Landsberg stated, “Trump appears to be shifting blame to strengthen his position in negotiations with Putin. While this may seem like window dressing, it aligns with his consistent focus on ending the war.”
  5. Economic Growth Expectations: While Trump’s push for deregulation could spur economic activity, Landsberg warned that persistent inflation might offset the benefits for certain sectors.

Landsberg concluded by highlighting the uncertain balance between Trump’s policy goals and the Federal Reserve’s monetary stance. “There’s a lot of rhetoric and negotiation at play, but investors need to focus on the actual data and longer-term trends to navigate these turbulent times”, he said.

Learn more about the discussion here: ‘Overwhelming disconnect’ between Trump and the Fed, advisor says

Landsberg Bennett is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC. All information referenced herein is from sources believed to be reliable. Landsberg Bennett and Hightower Advisors, LLC have not independently verified the accuracy or completeness of the information contained in this document. Landsberg Bennett and Hightower Advisors, LLC or any of its affiliates make no representations or warranties, express or implied, as to the accuracy or completeness of the information or for statements or errors or omissions, or results obtained from the use of this information. Landsberg Bennett and Hightower Advisors, LLC or any of its affiliates assume no liability for any action made or taken in reliance on or relating in any way to the information. This document and the materials contained herein were created for informational purposes only; the opinions expressed are solely those of the author(s), and do not represent those of Hightower Advisors, LLC or any of its affiliates. Landsberg Bennett and Hightower Advisors, LLC or any of its affiliates do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax or legal advice. Clients are urged to consult their tax and/or legal advisor for related questions.