Take up the punching bowl!?

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The answer is... "Central Bank". To briefly explain central banks: a central bank is the public institution at the core of a country's monetary system, usually established under special law, and functions as a highly public-oriented bank. It also oversees financial policies such as stabilizing the currency value, so it is often called the "Guardians of the Currency."

In Japan: Bank of Japan
In the United States: FRB (Federal Reserve Board)
In the EU: European Central Bank
In the UK: Bank of England
In Australia: Reserve Bank of Australia

etc. fall under this category.

However, the U.S. FRB (Federal Reserve Board) is named in Japanese as 「連邦準備制度理事会」, and as the name indicates, it is not precisely a bank. The United States does not have a single national central bank; instead, there are 12 regional Federal Reserve Banks (district banks). The central banking system is formed by their collective, and the entity that oversees it is the FRB.

The FRB consists of seven governors, and the chair is appointed by the president. And the Federal Open Market Committee (FOMC) decides on target interest rates, comprising the 7 governors plus the president of the New York Fed and four other regional Fed presidents (rotation), totaling 12 people.

Thus, the FOMC is also part of the U.S. central banking system. There are two reasons for adopting such a system. One is that the United States has strong state autonomy, so to disperse central bank functions and make the country's financial system operate effectively. The other is to prevent excessive influence from a single state by placing a central bank only in one state.

The power of the central bank, which issues currency and conducts monetary policy, is formidable. Therefore, central banks are required to have high independence. Specifically, they should not be subjected to pressure from the government or politicians regarding interest rate hikes or cuts. It would be detrimental to the economy if used for short-term government policy goals and electoral strategies.

However, President Trump has been acting contrary to this principle. He has frequently criticized FRB policy on Twitter. Recently, he tweeted that if the FRB had been doing its job properly, stock prices would have risen by 5,000-10,000 points, and economic growth would have exceeded 4%, not 3%.

Under the current Powell regime, is the FRB succumbing to or yielding to Trump’s pressure? Such opinions are also heard.(Reference video) A remark from NEC chair to Chair Powell A remark from NEC chair to Chair Powell

Also, ECB President Draghi stated at an IMF meeting that he is concerned about central bank independence in the world's most important regions. Normally, central bank officials avoid commenting on politics or economies of other countries, so this statement is highly unusual. It suggests that the current Powell regime is in trouble if other world leaders are saying so.

Currently, Nasdaq and S&P 500 are hitting record highs, and the U.S. economy is in excellent shape. Nevertheless, the current FRB has paused monetary tightening from last year and is turning toward easing.

Former FRB Chair William McChesney Martin, regarded as a model for chairmen, described the central bank’s job as “taking away the punchbowl just as the party starts to get interesting.” With that in mind, is the current FRB not only taking away the punchbowl but pouring more alcohol into it?! It goes without saying that the mood of drunkenness is only good at the start; excessive drinking is not good for the body.

PS.

“Like an alcoholic who never tries to know how much he has drunk,” says Dr. Elder, describing a loser this way.Furthermore, the doctor adds: “A loser trades as if in a fog, not understanding why they keep losing. If they understood the reason, they would have taken some measures to become a winner.”

If Chair Powell continues to pour more alcohol into the punchbowl, the market may eventually fill with losers without you realizing it. If you want to be among the handful of winners in such a situation, read Dr. Elder’s latest book “The Trading”.“The Trading”.

If a sober person and a drunk compete, you should be able to tell who would win. Sometimes the drunk may win, but normally you should bet on the sober person winning. You should strive to become a sober person.

PPS.
If you want to study trading during Golden Week, here is something to note! We are sharing a part of the explanatory videos from the members-only FX information service “Seiiwa Market School.” To defend your funds while also taking the initiative, it’s not about adding to existing rules but…【Video】How to improve the accuracy of trading methods

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