Markets Face Crosswinds At The Top

Market Commentary – August 11, 2025

Markets remain near historic highs as policy transitions take shape in Washington.

At the Federal Reserve (Fed), President Trump has nominated Stephen Miran to temporarily fill the vacancy on the Fed’s Board of Governors created by Adrian Kugler’s early resignation. It should be noted that Miran supports lower rates and has criticized Chair Powell’s reluctance to ease current policy. Trade policy is also evolving: tariffs on semiconductors and pharmaceuticals are expected soon, with exemptions for companies investing in U.S. production. These moves reinforce a broader strategy favoring domestic capital formation. Technology firms have pledged more than $2 trillion in new U.S. investment, focusing heavily on AI (artificial intelligence). A new executive order from Trump is designed to allow retirement plans to access private markets and digital assets, expanding consumer access alternatives. Regulatory engagement with blockchain is also increasing, with Ethereum gaining traction under the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act). Beneath the surface, market-based signals continue to support a constructive outlook that is being driven by productivity gains, industrial re-shoring, and leadership in innovation and growth.

The Fed In Flux

Treasury Secretary Scott Bessent is currently leading the search for a successor to Fed Chair Jerome Powell. The Wall Street Journal reports that the shortlist comprises 10 candidates, including current Fed Governor Christopher Waller; National Economic Council Director Kevin Hassett; former Fed Governor Kevin Warsh; former St. Louis Federal Reserve Bank President James Bullard; and Marc Sumerlin, a former economic adviser to President George W. Bush. As of last Thursday, the crypto-based prediction market Polymarket pegged Waller as the front-runner. Whoever it might be, if Trump announces a candidate for Fed Chair, Powell could be rendered a “lame duck” for the remainder of his term, reducing his influence over Fed decisions – particularly on interest rates.