Every business is regulated by an agency or department, sometimes companies love the regulations because it can keep competition out or at bay. Sometimes companies hate the regulations because it limits what they can do or want to do. However, most companies accept whoever is in power because there are limits to what they can do about it. In the financial world who the Fed Chair is important because banks loan out money hopefully at low rates and charge higher rates to customers and the difference is the spread. Ideally it is always in the banks favor.

In an article from Reuters, President-elect Trump had an interview with NBC News’ Meet the Press with Kristen Welker. It was a wide ranging interview and one of the many questions Mr. Trump was asked was will he ask Jerome Powell to step down to appoint someone else? Within the agencies and boards that report to government, there are some appointments that carry longer than 4 years, some as much as 10 years, with the idea they need to be apolitical or make the best decisions possible without political considerations. Although the results are political, the decisions are not supposed to be. In the case of Fed, no politician wants higher interest rates, they like low ones. However, in the struggle to keep the economy moving in the correct direction – interest rates go up and down.

Fighting with the Fed Chair, will score some political points, however the financial community will not like it and bondholders will not like it and they vote with their bond positions on a daily basis. In addition, Mr. Powell is a former private-executive and a registered Republican, which means Mr. Trump would be fighting against his supporters.

Linking to dividend paying stocks, there are many variables in investing and not liking someone is a short term reason, however through compound interest real money is made with the advantage of time. Sometimes you need a disrupter and sometimes you do not, it tends to be a balancing act particularly on the level of profits and ability to pay dividends. All companies are affected by government, but most want a long-term good relationship with the government.

There are more questions than answers, till the next time – to raising questions.