The Case for Fed Independence

To the Editor:
The point of the Federal Reserve is to make financial decisions based on what is best for America as a whole (“Trump Will Remake the Fed. Lower Rates Are Just the Start,” Cover Story, Aug. 1). What happens when Fed Chair Jerome Powell leaves and President Donald Trump appoints some MAGA loyalist? From then on, a few months before every election, the Fed will do whatever it can to “goose” the economy to favor the party in power. No thought will be given to what’s best for America. In an era of terrible partisan politics, this might be the worst of all.

Dave Shaw
Westmont, Ill.

Tariff Options

To the Editor:
If companies don’t push the increased tariff costs on to consumers, then earnings will suffer (“A Weak Jobs Report Signals Stagflation. Blame Tariffs,” The Economy, Aug. 1). If they were to pass on a decent portion of the costs to consumers, that would trigger inflation. Neither option would be good for the economy or the stock market.

Dennis Barnes
On Barrons.com

Smoke and Mirrors

To the Editor:
I don’t understand how an investment fund capitalized with $1.5 trillion of borrowed funds doesn’t increase the debt service obligations of the U.S. government (“This Senator Is Also a Doctor. He Wants to Heal Social Security,” At Barron’s, July 24). If all its investment earnings are used solely to buttress future Social Security payment obligations, then the debt service on those borrowed funds must be paid by taxpayers or it simply increases the federal government’s outstanding debt. If, instead, the fund pays those debt service costs from investment earnings, then those earnings will be sharply reduced, thus limiting the ability to support Social Security obligations in the future. This sounds more like smoke and mirrors than a plan.

Ken Rust
Lake Oswego, Ore.

M&A Valuation Metrics

To the Editor:
As Jacob Sonenshine indicates, the macro environment is highly conducive to increased merger-and-acquisition activity (“M&A Is Back. These Stocks Could Be Targets,” July 30). In composing my own list, I have added a few criteria to the specific valuation metrics highlighted in the article: The end markets of the targets must be mission-critical in nature, and the targets must provide desirable “tuck in” acquisitions by much larger companies looking to expand smaller but growing business lines within their own organizational framework. With this approach, anticipatory acquisition serves as a strong catalyst to unlock value. But there’s a secondary motivation for investing in these perceived targets. Should the acquisition not materialize, underlying fundamentals should be sufficiently strong to allow the targets to do well in their own right.

Rob Suthe
Bethesda, Md.

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