Clear Trail Advisors officially announced its transition to independence through a strategic partnership with Dynasty Financial Partners. The agreement will provide operational and administrative support, strengthen its investment capabilities, incorporate advanced planning and reporting tools, and position the firm for long-term growth, according to a statement released by Dynasty.
Formerly part of Steward Partners, Clear Trail Advisors is based in Houston and manages $850 million in client assets. The firm is led by its Chairman Randy Price, CEO Matt Price, and Matthew Kerns as President.
“Dynasty allows us to maintain fiduciary independence while gaining access to top-tier research, technology, and operational support,” said Randy Price.
The decision to become independent reflects the team’s commitment to objective advice and stronger client service, the statement noted.
As part of its new phase, Clear Trail is implementing improvements in planning, faster performance reporting, and a more proactive client relationship. The firm selected Charles Schwab as its custodian, highlighting its scale, stability, and strong presence in Texas.
“Clear Trail Advisors serves a clearly defined client base, has strong leadership, and is deeply committed to independent, client-centered advice,” said Shirl Penney, Founder and CEO of Dynasty Financial Partners.
The new RIA plans to expand its service model over the next two years by hiring a Director of Financial Planning and adding in-house tax experts, according to the announcement.
Stablecoins, cryptocurrencies generally pegged to the U.S. dollar and designed to maintain a stable value, are establishing themselves as a key player in the global financial system. According to an analysis by Jeffrey Cleveland, Chief Economist at Payden & Rygel, this type of digital asset could become the world’s largest offshore market, even surpassing the historic eurodollar market.
In his latest report, Cleveland draws a parallel between the rise of stablecoins in the 21st century and the expansion of eurodollars after World War II. While eurodollars (offshore dollar deposits) helped consolidate the dollar’s dominance internationally, stablecoins could amplify that hegemony in the digital environment. “Could stablecoins further reinforce the dollar’s status as the world’s leading currency? History suggests they could,” the economist posits.
Evolution of Offshore Dollars
He explains that the eurodollar phenomenon dates back to the mid-20th century, when various regulatory and geopolitical conditions led to a growing accumulation of dollars outside the U.S. In the 1970s, the market quintupled, and by the late 1980s, it already totaled $1.7 trillion in offshore deposits. Today, the eurodollar market is estimated to reach $16 trillion.
In his view, stablecoins follow a similar logic, though with a radically different infrastructure. Instead of being managed by banks outside the U.S., they are stored and transferred via public blockchains. Their market value is already approaching $250 billion, with daily trading volumes exceeding $24 billion, nearing that of Bitcoin and surpassing Ether.
“Unlike traditional cryptocurrencies, stablecoins aim to minimize volatility and are mostly backed by real assets. Currently, more than 95% of them are secured by financial instruments such as cash, Treasury bills, or money market assets. Issuing companies like Tether and USD Coin already rank among the top holders of U.S. Treasury debt, with more than $120 billion in sovereign bonds,” Cleveland notes.
Transforming the Global Payment System
Cleveland’s analysis highlights that stablecoins not only replicate many of the functionalities of eurodollars, but also offer competitive advantages that could accelerate their global adoption. These advantages include the ability to conduct transactions with immediate settlement, available 24 hours a day, seven days a week, independent of traditional banking hours. They also offer significantly lower transfer costs, often below three percent and, in some cases, even below one percent of the amount sent.
Added to this is a high level of transparency, as all transactions are recorded in real time on the blockchain, allowing traceability for both users and regulatory authorities. Furthermore, their accessibility far exceeds that of traditional financial systems: anyone with internet access can use stablecoins without intermediaries or bank accounts, opening the door to broader and more global financial inclusion.
These features have already been adopted by the private sector. For example, SpaceX uses stablecoins to collect payments for its Starlink satellite network services. In the past year, the average monthly transaction volume in stablecoins exceeded $100 billion, even surpassing the volume processed by the Visa payments network.
In addition, stablecoins are being used in the decentralized finance (DeFi) market to generate interest, often higher than what traditional banks offer.
Into the Unknown
Cleveland warns that, like eurodollars, stablecoins could pose macroeconomic challenges in the event of liquidity strains or crises of confidence. In 2008, the eurodollar system was one of the focal points of the global financial crisis, due to the pressure to quickly convert offshore deposits into “onshore” dollars.
However, the rise of stablecoins also represents a historic opportunity to strengthen the dollar’s dominance in the digital economy. Despite past efforts by governments to reduce the global influence of the dollar, Cleveland argues that these digital currencies could further deepen its global presence.
“We’ve seen this movie before. Eurodollars cemented the dollar as the hegemonic currency in the 20th century. Today, stablecoins may be writing a new chapter in that same story,” the economist concludes.
ProShares, provider of leveraged and inverse ETFs, announced the launch of ProShares Ultra QQQ Top 30 (QQXL), the first and only ETF designed to offer twice (2x) the daily performance of the Nasdaq-100 Top 30 Index.
In this way, the company expands its $40 billion range of leveraged and inverse ETFs linked to the Nasdaq-100, which includes ProShares UltraPro QQQ (TQQQ), the largest leveraged ETF in the world.
The Nasdaq-100 Top 30 Index offers concentrated exposure to 30 of the largest and most influential companies in the technology-focused Nasdaq-100 Index, with leading companies such as Nvidia, Apple, and Meta Platforms.
“In recent years, market leadership has concentrated in a group of innovators—many in the technology sector—who are redefining what is possible, a trend that investors want to capture,” said Michael L. Sapir, CEO of ProShares. “With QQXL, investors can now seek twice the daily returns of these market leaders with the ease and convenience of a single ETF trade,” the executive added.
ProShares manages more than $90 billion in assets, pioneered the leveraged and inverse ETF category nearly two decades ago, and remains the largest provider globally. It offers funds linked to major stock indices, individual equities, fixed income, commodities, currencies, cryptocurrencies, and volatility.
Miami Surpasses New York as the Leading Global Market for Ultra-Luxury Second Homes, According to Altrata Report
Miami has established itself as the global leader in the ultra-luxury second home market, surpassing New York for the first time, according to Residential Real Estate 2025, a report by Altrata sponsored by REALM. The report notes that there are 13,211 individuals who own such properties in the city of Miami, compared to 12,813 in the Big Apple.
The UHNWI (ultra-high-net-worth individuals—those with net assets exceeding $30 million) segment has increasingly chosen the Florida city as a preferred destination, overtaking historic financial hubs such as New York, London, and Dubai.
“Miami has seen a strong influx of ultra-wealthy residents since the pandemic. The most prominent groups have been wealthy entrepreneurs from other parts of the United States and the expansion of an already sizable Latin American diaspora,” Altrata states in the report.
“The city has long been a popular destination for affluent buyers seeking an additional residence, attracted by Florida’s favorable tax regime, warm climate, and coastal location. Second homes account for just over three-quarters of the UHNW residential footprint in Miami—the highest proportion among the top 20 cities,” the report adds.
“We live in a world where wealth is no longer confined by borders,” said Julie Faupel, founder and CEO of REALM, a global luxury real estate membership platform. “Today’s wealthy are more mobile, more diversified, and have a stronger global presence than ever before,” she added.
Despite Miami’s rise, New York still tops the list of the world’s 20 leading cities by overall residential footprint, with over 33,200 UHNW individuals, followed by Los Angeles and Hong Kong, each with residential footprints nearing 20,000. Miami ranks fourth on that list, ahead of London, with nearly 18,000 UHNW residents.
“The luxury real estate market in New York has slowed in recent years, constrained by rising interest rates, limited inventory, and intense global competition in the second-home segment (including from other U.S. cities). Nonetheless, New York remains a powerful magnet for the wealthy, offering a blend of luxury consumption, vibrant culture, high-quality education, and prestigious lifestyle, with Manhattan at the epicenter of the luxury property market,” the report also notes.
Los Angeles and San Francisco rank third and fourth respectively in terms of UHNW individuals with second homes, each with more than twice the number found in the next most popular city, Boston. In both California cities, UHNW presence is fairly evenly split between primary and secondary residences.
Naples and Greenwich stand out as smaller urban centers that are highly sought-after for second homes. The seaside resort town of Naples, in southwest Florida, is an outlier with the highest proportion of UHNW second-home ownership, representing 95% of its ultra-wealthy residential footprint. Greenwich, meanwhile, has a high proportion of second-home ownership similar to Miami, attracting affluent buyers with its proximity and access to Manhattan, coastal location, low tax rates, and expansive luxury properties.
DWS Group adds Marwin Martinez in Miami as senior Xtrackers sales specialist for the US offshore & non-resident clients market, according to a post shared by Martinez on his LinkedIn profile. According to information obtained by Funds Society, he will be responsible for managing relationships with financial intermediaries serving Latin American clients.
“I’m pleased to share that I’m starting a new position as Vice President, Senior Sales Specialist of Xtrackers – U.S. Offshore & NRC Business at DWS Group,” wrote Martinez, a professional with experience in relationship management and a strong track record in the industry.
He worked for six years at asset manager Vanguard, across two separate periods. His last role at Vanguard was similar to his current position at DWS. Prior to that, he spent 11 years at AllianceBernstein, where he held various positions and ultimately served as Assistant VP – Senior Relationship Manager Latin America Institutional, US & Canada Offshore.
Martinez holds a degree in International Business and Finance from Temple University – Fox School of Business and Management, and also holds FINRA Series 7, 6, and 63 licenses.
The Difference Between the Risk an Investor Is Willing to Take and the Risk They Should Take Is Not Academic—It’s the Difference Between Checking Boxes and Delivering Truly Suitable Solutions
According to Oxford Risk, for many years, advisers and firms have relied on some version of what is often called Attitude to Risk (ATR) as the main— and in many cases, the only—criterion for portfolio selection. However, they believe that ATR was never truly fit for purpose. “It provided an easy number to anchor to, but not a complete picture. It only captures part of what we need to know about an investor, and often not even that particularly well,” the firm argues.
Oxford Risk’s approach begins with a simple premise: the amount of investment risk an investor should take—their Suitable Risk Level (SRL)—must be based on a more complete understanding of who they are and how they relate to their investments. This requires moving beyond a narrow focus on a single attitude and instead considering a combination of key factors:
Risk tolerance, understood as a long-term psychological trait that reflects how much risk an investor is willing to take in relation to their total wealth;
Risk capacity, representing their financial ability to take on risk, considering time horizon, dependency on assets, income stability, and liquidity needs;
Behavioral capacity, referring to their emotional strength to tolerate market volatility, expressed in traits like composure; and finally,
Knowledge and experience, which help assess the investor’s familiarity with the investment world and may temporarily limit their exposure to risk.
Each of these components plays a distinct and complementary role in constructing the investor’s SRL.
The Limits of “Attitude” Toward Risk
The term attitude to risk conceals significant complexity. Each investor has multiple attitudes toward risk: long-term and short-term; rational and emotional; domain-specific and general. What matters is not how a person feels about risk today or in response to recent events, but their stable, long-term willingness to balance risk and return across their total wealth over time.
This is precisely what a well-designed risk tolerance assessment should measure. But market RTA tools often fall short: they confuse risk tolerance with optimism, confidence, or knowledge; they fail to isolate the core trait; and they produce unstable results that may change drastically with the markets.
Moreover, ATR—even when well-measured—is only part of the story. Most tools that use ATR completely ignore risk capacity, and with it, the dynamic life context of the investor’s financial situation. In their view, risk tolerance tells us how much risk people are willing to take; risk capacity, how much they can afford to take. “Ignoring the latter can cost decades of compounded growth and lead to very unsuitable long-term outcomes. Suitable risk isn’t what feels safe today, but what supports financial security over time,” they note.
From Investor to Portfolio
At Oxford Risk, they believe that understanding the investor is only half of the equation. “Assigning them the right portfolio also requires knowing the long-term risk level of that portfolio. This is where another mismatch often arises. Too often, portfolio risk is assessed using short-term historical volatility—a highly unstable and context-dependent measure. This leads to inadequate risk labels and poor long-term alignment,” they state.
In their view, what’s needed is stability on both sides: a stable measure of the investor’s SRL, based on proven traits and models over time; and a stable measure of portfolio risk, based on expectations of long-term outcome uncertainty. “Only if both conditions are met can we ensure that the risk match is accurate at the time of recommendation and remains appropriate as both markets and personal circumstances evolve,” they affirm.
Their key conclusion is that attitude to risk was a useful stepping stone, but it is no longer sufficient (indeed, it never truly was). “A truly suitable level of risk must combine: a precise, psychometric measure of risk tolerance; a forward-looking, situational awareness of risk capacity; a behavioral understanding of composure and its effect on behavior; and an appreciation of knowledge and experience and their role in informed decision-making,” they argue.
In their view, only in this way can we deliver investment solutions that align not only with what an investor says or feels, but with who they are, where they are in life, and the best way to support their long-term goals. “Suitability is not a number. It is a relationship (between investor and investment) based on understanding, adapted over time, and empowered by technology that embeds science into every recommendation,” they conclude.
Pixabay CC0 Public DomainDiaphanum Considers Asset Valuations Demanding
The damage is done, and the crisis unleashed by U.S. sanctions on three Mexican financial institutions is now set to be resolved through several avenues: political, judicial, and, in the case of Intercam, through a sale.
The U.S. Department of the Treasury has granted a new extension to CI Banco and Intercam, as well as to the Mexican brokerage firm Vector, which now have until October 20, 2025, to reach agreements and address the findings—or be disconnected from the U.S. financial system. The previous deadline had been set for September 4.
This marks the second time the Financial Crimes Enforcement Network (FinCEN) has extended the deadline.
“This extension reflects the continued measures undertaken by the Government of Mexico to effectively address the concerns raised in FinCEN’s orders, including maintaining temporary administration of the affected institutions to promote regulatory compliance and prevent illicit financing,” the Treasury Department stated in an informational note released Tuesday evening when announcing the extension for the Mexican financial institutions.
“Death Sentence”: CI Banco
The extension was granted despite reports earlier this week that CI Banco filed a lawsuit against the U.S. Department of the Treasury and FinCEN over the money laundering accusations made against it. CI Banco argued that the institution had been given a “death sentence” by being effectively blocked from the U.S. financial system.
The bank accused the Treasury and FinCEN of damaging its reputation and credibility without presenting solid evidence, which immediately triggered a managerial intervention by Mexican authorities in the institution, as well as in the other two implicated entities.
CI Banco has been seriously affected by the accusation. On Tuesday, it was also reported that Grupo Financiero Multiva signed an agreement to acquire all of CI Banco’s trust business assets, although the financial terms of the deal were not disclosed.
However, data from the National Banking and Securities Commission (CNBV) show that, as of the end of June this year, CI Banco’s trust business amounted to 3.102 trillion pesos (around USD 163.266 billion), representing 26.7% of the entire system.
In contrast, Multiva’s trust business stood at 33.733 billion pesos (USD 1.775 billion), just 0.29% of the more than 11.5 trillion pesos (USD 605.264 billion) handled by the banking sector’s fiduciary operations.
“With this transaction, Banco Multiva, in its capacity as trustee, will ensure the continued normal operation within the applicable regulatory compliance framework, guaranteeing the protection of the rights of the parties involved in the trust businesses,” Multiva stated in a message sent to the Mexican Stock Exchange.
Intercam Fails to Withstand Pressure, Sells to Kapital Bank
Intercam could not withstand the pressure triggered by accusations of alleged money laundering operations by the U.S. Department of the Treasury. The institution—which next year would have marked 26 years in operation as a financial group—announced its sale to Kapital Bank.
Kapital Bank, a Mexican financial institution, will acquire the assets, liabilities, branches, and trusts of Intercam Banco, Intercam Casa de Bolsa, and Intercam Fondos. The total value of the transaction was not disclosed.
The acquisition, subject to approval from the CNBV and other regulatory authorities, represents a strategic move for Kapital Bank and an opportunity to strengthen its operational capacity and value proposition for corporate clients.
Kapital Bank announced it will inject USD 100 million to reinforce Intercam’s operations, provide greater financial stability, and ensure the fulfillment of obligations to clients and investors.
Second Extension
The initial deadline to disconnect the accused Mexican institutions from the U.S. financial system had been set for July 21. However, just days before that date, the first extension was granted through September 4.
Now, a second extension has been issued to allow the institutions involved to comply with the orders issued by the Treasury Department. However, while that process unfolds, the damage continues. On Tuesday night, in addition to news of the sale of CI Banco’s trust business, the potential end of Intercam was revealed, as it sells its assets to a smaller bank.
Merrill Lynch Wealth Management announced the promotion of Fabio Concesi to market executive for the Palo Alto, California market. Until this past July, Concesi served at the investment bank as associate market executive in the Wealth Management Miami & Islands division.
“I’m pleased to announce that Fabio Concesi has been named market executive for the Palo Alto market,” wrote Brian Ludwick, managing director of Merrill Lynch’s Wealth Management division, on his LinkedIn profile, where he invited others on the platform to congratulate Concesi on his new role at the firm.
In a post on his own profile on the same social network, Concesi wrote that he feels “honored and grateful for this incredible opportunity” to lead Merrill’s Palo Alto market and “our talented financial advisors and associates.”
According to his LinkedIn post, they aim to “empower our teams in Palo Alto and San Mateo with all the resources they need to help clients achieve their financial goals and life purposes.”
A graduate of Universidade Candido Mendes in Rio de Janeiro with a postgraduate law degree from the Universitat de Barcelona, Concesi began his professional career in 2004 at PwC Brazil before joining Citi, where he worked for nearly 10 years, based in Barcelona, Zurich, and Miami. In January 2016, he joined Merrill Lynch Miami, covering Wealth Management.
Despite the imminent arrival of the so-called “generational wealth transfer,” which will bring a larger number of high-net-worth individuals (HNWIs) and fewer advisors to serve them, many wealth management firms are simply not prepared for success. According to the report “Capturing HNWI Loyalty Across Generations,” published by Capgemini, to ensure that private bankers can interact effectively with this new generation, firms must evolve rapidly on an organizational level but, above all, technologically.
“Wealth management executives who delay will face significant risk of losing both investors and talent to more agile competitors. The leading wealth management firms are adopting AI-based, industry-focused relationship management tools, as well as omnichannel experiences that eliminate manual processes, provide real-time guidance, and autonomously perform predefined tasks. By supporting their advisors and building loyalty among the next generation of HNWIs, these firms are positioning themselves to ensure long-term engagement and sustained business benefits,” the report’s authors state.
Signs of Impending Disruption in the Sector
With the global increase in the population of high-net-worth individuals (HNWIs), many wealth management firms are optimistic about expanding the population they aim to serve. In this context, the report asserts that “the great wealth transfer is also set to disrupt the wealth management sector by significantly straining, or even breaking, well-established loyalty ties.”
According to its analysis, private bankers now face the convergence of three significant trends related to HNWI loyalty. The first is a shift in investment preferences among the next generation of HNWIs. “Comprising Generation X, millennials, and Generation Z, this group expects hyper-personalized engagement. In fact, 81% of next-generation HNWIs plan to quickly leave their parents’ wealth management firm, driven by factors such as the lack of preferred digital channels (46%), lack of alternative investments (33%), and insufficient value-added services (25%),” it states.
Secondly, there will be an increase in the volume and diversity of HNWIs. The report indicates that as family wealth passes down through multiple successive generations, the number of clients to serve grows exponentially. Moreover, more than half (56%) of total wealth is expected to be transferred to women, who may have investment goals, styles, and priorities significantly different from those of men.
And thirdly, firms will face a changing landscape due to the imminent wave of retirements, which will leave an increasingly smaller number of experienced bankers. “Who will take their place? A stream of young, digital-native professionals who expect the workplace to evolve both technologically and culturally. In fact, they are already expressing such significant discontent that approximately one-fourth plan to switch wealth management firms or start their own in the near future,” the document states.
In other words, in the very short term, there will be more high-net-worth clients to serve, with a broader range of expectations for hyper-personalized services, while the supply of senior bankers will drastically decline.
The Value of Private Bankers
As for the importance of the banker in the loyalty-building process, our research also revealed that two-thirds of next-generation HNWIs consider the strength of a firm’s private banker team a key factor when choosing a wealth management provider. Sixty-two percent of next-generation HNWIs state they would follow their relationship manager if they moved to another firm, meaning loyalty is no longer based on the institutional ties felt by previous generations.
However, 56% state that their firms lack the necessary tools to meet the needs of next-generation HNWIs—namely: proactive information, personalized recommendations, and seamless communication across different channels. In light of the report’s findings, it is clear that to build loyalty among next-generation HNWIs, wealth management firms must strengthen their relationship management stance. This includes modernizing live and self-service technologies required to meet client expectations.
The Right Technology at the Right Time
The report notes that, as in many current situations, leveraging automation strategically is not about adopting technology for its own sake. According to its assessment, the key lies in understanding what next-generation HNWI clients expect from their wealth management firm and what tools private bankers need to earn their loyalty.
For example, despite the ubiquity of mobile apps, a surprising finding in the report was the greater interest of next-generation HNWIs in video calls and website interactions over mobile apps. In some types of interactions—such as making inquiries or addressing a concern—even traditional phone calls prevailed over apps.
“Less surprising was the decline in interest in face-to-face meetings, which generally received the lowest rating across all interaction types. The only exception was seeking expert advice, where face-to-face meetings ranked second to last—although only by a small margin,” the report concludes.
Developing an Approach That Fosters Loyalty
To address the imminent shortage of private bankers and ensure that advisors have the tools they need, start by developing a strategic approach to guide the technological transformation for next-generation HNWIs. According to the report, critical aspects include:
Assessing Digital Capabilities.
Since next-generation HNWIs expect seamless, convenient digital channels that allow them real-time access to personalized and relevant information, it is necessary to determine whether the service offering requires any updates. Similarly, the report advises that the platform should enable advisors to deliver hyper-personalized and omnichannel experiences quickly and efficiently.
Adopting Artificial Intelligence.
Ensure that bankers have access to the latest AI tools, including generative AI (GenAI) and agentic AI technologies. “Advanced solutions integrate multiple internal and external sources to eliminate manual tasks, provide actionable insights, and generate real-time recommendations on next steps—allowing advisors to focus their expertise on strengthening client relationships,” the document states.
Incorporating Behavioral Dynamics Technologies.
“It’s no secret that emotions and biases can lead to irrational financial decisions that deeply affect client portfolios and the profitability of wealth management. By adopting modern AI-based behavioral dynamics tools, wealth management firms can empower bankers to quickly identify and navigate clients’ behavioral investment patterns. These types of solutions can also dramatically enhance and hyper-personalize the firm’s communications to help influence how clients invest,” it adds.
Ensuring Readiness for AI Technology.
To get the most out of AI-based solutions, the document notes that it is essential “to be comfortable, confident, and skilled in using the tools.” In its view, only by providing private bankers with sufficient training and peer mentoring will investments in artificial intelligence achieve the desired outcomes.
“Monitor and refine the implementation of technology based on feedback from the firm’s private bankers and next-generation HNWIs. Continuously evaluating your digital tools ensures that your firm can make quick and timely adjustments,” the report concludes.
Just Weeks Ago, Through the Truth Social Platform, U.S. President Donald Trump Announced the Appointment of Stephen Miran as a New Member of the Federal Reserve Board of Governors (Fed) Following the Resignation of Adriana Kugler
Miran will temporarily assume this position only until January 31, 2026. This appointment covers the period while a successor is selected for Jerome Powell, whose term as Fed Chair ends in May 2026.
So, who is Stephen Miran? Until now, Miran held the position of Director of the Council of Economic Advisers (CEA), to which he was appointed by Trump in December 2024. According to analysts, he is considered the architect of Trump’s reciprocal tariff policy and the promoter of a plan called the “Mar‑a‑Lago Accord,” aimed at countering the overvaluation of the dollar and restructuring the global trade system. Additionally, he has been one of the most vocal critics of the Fed’s independence and has made numerous proposals, such as shortening the terms of Fed governors or changing the way they are appointed.
Key Ideas: Dollar and Bonds
Regarding Miran, Gilles Moëc, Chief Economist at AXA, notes that his essay on how to distort the global monetary system to better serve U.S. economic interests is highly insightful for understanding his views. “In it, he outlines several ways to provoke a depreciation of the dollar without causing a drop in demand for U.S. assets, which would otherwise lead to rising interest rates in the U.S. and, eventually, an economic slowdown, further complicating the already complex budget equation,” he states.
In this context, Moëc summarizes that Miran’s idea is that, under a “Mar‑a‑Lago Accord”—inspired by the Louvre and Plaza Agreements of the 1980s, when Europe and Japan coordinated efforts to devalue the dollar—foreign central banks would agree to shift their reserves into very long-term or even perpetual U.S. Treasury bonds. This would limit long-term interest rates, while private investors would exit the U.S. market in anticipation of the dollar’s depreciation.
“Miran himself emphasizes how unlikely it would be for Europeans to accept such a measure and therefore introduces a coercive dimension: long-term investment in U.S. debt would be the ‘compensation’ Europeans pay to avoid tariffs and benefit from Washington’s continued military protection. However, and this is a point Miran raises without resolving, a significant problem is that European investments in the U.S. are mainly the result of countless decentralized decisions made by private actors: real-economy companies for direct investment, and asset managers and institutional investors for portfolio flows.”
According to Moëc, Miran’s essay proposes another “worrisome” idea: the possibility of taxing the interest paid on Treasury securities to non-resident investors. In his view, this would likely drive them away from the U.S. bond market, but given the difference between the amount of central bank reserves and the U.S. assets held by private investors, “the net effect on the overall cost of U.S. financing could be dramatic for the health of the U.S. economy.”
“In short, the current U.S. approach to its trade and financial relations with Europe aims to improve a situation already highly favorable to the United States. There is a limit to how far American interests can be pursued through coercion. Europeans may come to see the macroeconomic cost of maintaining a close political and defense relationship with the U.S. at all costs as too high, making other geopolitical options more acceptable,” he concludes.
The Fed and the FOMC
The second assessment from experts is that Miran’s arrival at the FOMC will generate some conflict due to his view that the dollar is overvalued and that the U.S. trade balance cannot be rebalanced as a result. “He believes that, to secure the financing of U.S. public finances, other countries could be made to purchase very long-term Treasury bonds. This likely came up during tariff negotiations. I’m thinking, for example, of the $600 billion from the European Union and $550 billion from Japan, which Trump wants to use at his discretion,” says Philippe Waechter, Chief Economist at Ostrum AM (a Natixis IM affiliate).
According to his analysis, for the Fed, a fall in the dollar would trigger an inflation shock that would add to the impact of tariffs and, in such a case, the Fed would need to raise its policy rate. Moreover, if a “Mar‑a‑Lago Accord” were perceived by investors as credible, it could trigger significant capital outflows from U.S. markets; if not, any drop in the dollar would be seen as an opportunity. For Waechter, “the power struggle between Powell and Miran will be crucial for everyone. The risk is that U.S. monetary policy becomes subject to White House directives. That would be a disaster.”
A similar warning comes from Muzinich & Co: “Personnel changes matter less for the short-term path of official interest rates—which markets still expect to trend lower—than for the issue of institutional independence. Trump’s repeated public criticisms of Powell, calling him ‘too slow’ and an ‘idiot,’ among other insults, keep alive the possibility of a leadership transition at the Fed aligned with the administration’s more interventionist economic stance.”
In this context, Enguerrand Artaz, strategist at La Financière de l’Échiquier (LFDE), adds that “the Fed’s independence has come under attack, and the central bank’s communication is going to be complicated over the coming months.” For Artaz, this situation is part of a broader institutional dynamic: “The functioning of U.S. institutions has been weakened during the early months of Trump’s term.” This structural weakening is accompanied by “enormous uncertainty regarding its impact on growth and inflation.”
The outcome of Powell’s succession will mark a dividing line between two conceptions of the Federal Reserve’s role: as a technical guarantor of macroeconomic stability or as a political tool serving the presidential agenda, he concludes.
