Bigworld, On the investing side, figuring out how much to have at risk in stocks over the next 6 months is a challenge. On the bullish side is the Fed's reduction in QT starting in June (from 60 bil to 25 bil / month). This not only helps the Fed avoid 'repo' liquidity problems within the banking system, but it's a lower visibility way to help Biden's reelection.
Trump's coming out vocally against the Fed doesn't seem like a smart move. Politically he already has the hard core 'anti-Fed' type vote anyway, and it probably won't resonate that much with the broader public. What it does do though, is to make the Establishment even more determined to keep him out of office. If there was any doubt in their minds, it was removed by Trump saying that he wants to fire Powell and rein in the Fed's independence. And the millions of voters with 401K and IRAs increasingly don't want to rock the boat too much, so it seems like a bad strategic move for Trump.
One would think that the 'Establishment' want the economy and stock market on an even keel leading up to the election, since that will help the incumbent. Towards that end, they would go into kumbaya mode, and sugar coat the financial and economic news, and even massage the inflation and economic data to fit the desired 'stable' narrative. On the non-financial / economic side, they could try to stir up the identity politics aspects, but this could backfire and result in a higher MAGA voter turnout too. So they might go with a low key approach, with the current college unrest being an aberration, with a separate motivation.
Anyway, assuming the geopolitical events don't blow up big, it may be wise to keep a modest allocation in stocks, despite the many landmines. But best to stay nimble since the above analysis could be way off. But logically, if pre-election turmoil (as in 2020) is bad for the incumbent Party. then they may strive for relative kumbaya. Then the election is close, and they just digitally massage the numbers if needed to get the desired result. So Trump is effectively out of the picture, things chill out, the CBDC rollout can proceed unimpeded, etc.
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