Despite Donald Trump’s threats to oust the Fed chair, markets remain steady as the US economy holds strong. Assets like equities, bonds, and gold are moving independently, reflecting a healthy economy with no dominating variable. Investors are focusing on earnings and balance sheets, not just central bank policy, showing internal market logic.

Market reactions to political and economic shocks have been muted, pushing asset correlations back to pre-rate-hike levels. Investors believe Trump is bluffing on trade, leading to increased risk-taking across financial markets. Despite ongoing challenges like inflation and government spending, diversification remains key for investors seeking stability.

The current market regime, characterized by low inflation and stable growth, may not leave much room for surprises. However, fears of inflation spikes could increase asset correlations, impacting the performance of stocks and bonds. Investors are cautioned against getting too comfortable with the current market conditions, as unexpected events could still disrupt the calm.

Read more at Yahoo Finance: Trump Threats, Fed Feuds Fail to Break Markets as Logic Prevails