This Is Why Fed Chair Powell Said Trump Can’t Fire Him

Trump criticized Yellen in the past. Now Powell is in the line of fire. The reason is well-known. Trump strongly feels rate hikes are a threat to the growth of the US economy. Some experts agree while others disagree with that stand. Only time will prove whether Trump is right or wrong.

What Powell and Fed did that has angered Trump?

Under Powell, there were in total 4 rate hikes in 2018. (In 2017 there were 3 hikes). The first hike during March revised the rate to 1.50-1.75 range from 1.25-1.50. Then there were two hikes in June and September. The last one in December took the rate to 2.25-2.50. The rate has almost doubled since 2017.

Is Powell-Trump relationship heading in the same direction as that of Trump-Yellen?

The former chairman, Yellen, was not in good terms with Trump (at least towards the end of her first term). She wasn’t nominated for the second term. (Historically, it is almost customary for the Fed chiefs to be nominated for the second term.)

Can Trump fire Powell as a last resort? In a recent interview, on a question regarding the President’s Criticism, Powell replied he can’t be fired because the law doesn’t allow that. On a further note, he said he would continue his service in an unbiased manner.


This Is Why American Airlines Trusts Boeing 737 Max 8s Even After 2 Crashes

A Boeing 737 Max 8 costs over $50 million dollars. The plane enjoys high demand from commercial airline operators across the globe. Boeing 737s have received an average of over 550 orders every year since 2016. Max 8 is one of the latest variants that promises better fuel efficiency and improved range.

In spite of the commercial successes, not all has been good for Max 8s. Including the Ethiopian crash of March 2019, there have been 2 fatal crashes in under 6 months. The first crash involved an Indonesian plane flying from Jakarta to Pangkal. The plane crashed minutes after takeoff. There were no survivors. The crash happened on October 29, 2018. The recent crash of the Ethiopian plane (flying from Addis Ababa to Nairobi) has been similar to the Indonesian crash. Like the 2018 crash, in the recent incident, the plane crashed minutes after take off. Aviation experts have been raising questions on the similarity of the crashes. They fear there could be a common underlying problem which Boeing has to fix.

After the second crash of Max 8, several countries have grounded the planes until investigation. China has grounded nearly a hundred planes. Ethiopia and Indonesia have grounded theirs as well.

In the US, the operators have begun reacting the crashes. American Airlines has expressed full confidence in Boeing Max 8s. Having over 20 jets, the airlines has expressed full faith in the expertise of the crew. In its words, the airline has stated their crew members are the “best and the most experienced”. The airlines seems to be waiting for official investigation and reports that could prompt action in the future. As of now, there will be no groundings.

This Is The Reason Why Tesla Is Rising Prices By 3% After March 18

A month back, Tesla made an announcement. The electric car giant announced the closure of physical stores. The company said the sales will be only online thereafter. The primary reason for the closure was to reduce costs and in turn pass the benefit to the customers. The move enabled Tesla to cut prices of Model S and X by about $10,000. Also, the company began selling Model 3 at an unprecedented low price of $35,000.

The closure of physical stores led to a layoff of an estimated 3000 workers. The move was criticized by different segments of society. However, Tesla had to sacrifice to sustain.

One month has passed. A change in the earlier plan has just been conveyed by Tesla. The company is not going to close all the offline stores. Instead, Tesla will keep stores in highly visible areas open. However, the size of the staff will be reduced in the stores. Another 20% of the stores are under review. The decision on opening or closing stores from the review list will be taken in the near future.

The reopening of the stores will have an impact on the current prices. There will be an increase of about 3% in prices on Models S and X. But the price of Model 3 will be maintained at $35,000. According to reports, customers who order before March 18th can avail the current low prices.

Here Is How Boeing Shares Performed During The Last Indonesian Crash

At the time of writing this post, Boeing share price is struggling. By 11.30 am on March 11, the NYSE: BA is trading at $396 which is 6.7% down from the open price. One has to wait until the evening to see the final impact. History is a teacher and a reasonable predictor. Let us now check and learn from the impulsive reaction of the markets during the previous crash.

About Previous Crash

Last major crash of 737 happened 6 months ago in Indonesia. On October 28, 2018, a flight took off from Jakarta towards Pangkal. Minutes after the takeoff the plane crashed. Everyone on board was killed. Questions were raised about software, autopilot and other aspects of 737 Max 8.

How Markets Reacted

The crash happened on a Sunday. Once the news spread, stocks crashed on Monday. Compared to Oct 26 (Friday) close of $359.3, Oct 29th witnessed a decline of 6.5%. (The close price on Monday was $335.6). On Tuesday the stocks recovered. The prices rose to $349.9 or about 4% from Monday’s close. However, the prices were still lower compared to the pre-crash prices.

5 Fascinating Facts About NVIDIA’s Largest 6.9$ Billion Aquisition Of Mellanox

NVIDIA’s largest acquisition in history will conclude by the end of 2019. The chip maker giant has outbid the rivals Intel and Microsoft to acquire Mellanox. Below are 5 fascinating facts about the “all-cash” deal.

  1. NVIDIA will pay $125 in cash per share of Mellanox. Mellanox shares haven’t ever reached such a high price on open markets.
  2. NVIDIA has reportedly outbid INTEL by a whopping 1$ Billion.
  3. Half of the worlds top 500 supercomputers use technologies of NVIDIA and Mellanox.
  4. NVIDIA can now optimize datacenter connectivity and efficiency. Optimization will reduce costs improve margins in the long run.
  5. Integration and optimization of technologies are going to be seamless as the two firms have partnered in projects before.