God, Gold & Trump’s Big News - Top 3 Takeaways – May 7th, 2025
Takeaway #1: Let the Pontifficating Begin
The papal conclave at the Sistine Chapel in Vatican City is underway today as the Catholic Church seeks to elect it’s 267th pope and the chimney watching, to look for the color of smoke after a papal vote will soon begin. Black means no pope, white means it’s a go. 133 cardinals have gathered at the Sistine Chapel to elect the next pope – the most ever. Ten of the cardinals are from the United States (though don’t count on an American becoming pope in our lifetimes...or potentially ever). Five frontrunners are said to have emerged (and this is reflected in the betting markets, for what it’s worth). The names floated include: Luis Tagle of the Philippines, a 67-year-old progressive, Pietro Parolin of Italy, a 70-year-old moderate, Peter Turkson of Ghana, a 76-year-old progressive, Peter Erdo of Hungary, a 72-year-old conservative (and my preference if this list of contenders is accurate) and Angelo Scola of Italy who is an 82-year-old conservative. That’s two conservatives, two progressive’s and a potential pope in the middle. In order for a pope to be elected, a candidate must receive two-thirds of the vote plus one. With 133 electors the next pope needs at least 89 votes to be elected. One vote can take place today. If there’s not a pope elected in the first round there can then be two rounds of voting for each of the next two days. If after three days of voting a pope hasn’t emerged there’s a day taken off for the cardinals to go pray about the best path forward. There’s no timetable attached to the election of a pope. The cardinals stay at the Vatican and vote until we have a pope. The shortest time it took to elect a pope was ten hours in 1503. The longest it took to produce a pontiff was nearly three years!... in 1268 (maybe the cardinals were a little too comfortable in the confines of the Vatican that time). As I mentioned shortly after the passing of Pope Francis, what comes next from the Vatican potentially matters more than anything else happening in the world right now – which is saying something. I’ll pray that the next decision, no matter who ends up as pope, prioritizes God’s word, over the current ways and temptations of the world, and would encourage you to do so too. The fate of the Catholic faith, but also the world, may hang in the balance.
Takeaway #2 Speaking of pontification...Trump & the Fed
Here’s something that we’re certain will happen today. The Federal Reserve will announce their current monetary policy. President Trump will be extremely vocal about the Fed’s monetary policy. For over a month Trump has been complaining about the Federal Reserve’s decision to leave interest rates unchanged despite the inflation rate having dropped from 3% to 2.4% since Trump became President of the United States. Three weeks ago, as the ECB, the Federal Reserve equivalent in Europe, dropped interest rates again Trump said this: The ECB is expected to cut interest rates for the 7th time, and yet, “Too Late” Jerome Powell of the Fed, who is always TOO LATE AND WRONG, issued a report which was another, and typical, complete “mess!” Oil prices are down, groceries are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough! That was the Truth that spoked the markets as speculation swirled that Trump might attempt to take out Powell before the end of his term – something that Trump shortly thereafter clarified that he wasn’t planning to do. Nevertheless, if Trump thought that Too Late was Too Late a month ago – I can’t imagine he’s likely to be pleased today if this goes the way it’s expected to trade. Investors currently have priced a 95.5% chance of no change in interest rates taking place today, meaning that the earliest a cut would come would be during the second half of June – close to six weeks away. Trump is right about this – the Fed is wrong and is currently behind the curve. Not only is the rate of inflation the lowest it’s been in over four years, but the last time the inflation rate was this low the Federal Reserve’s interest rate was at .0 to .25%. Today it remains at 4.25% to 4.5%! That’s insane! The housing market is screaming for an interest rate cut, and the Fed’s argument that tariffs will raise the inflation rate is also questionable at best. There’s ample evidence that rather than paying higher prices due to tariffs, companies will eat most of the increase and consumers will simply buy fewer things at higher prices – meaning the economic effect isn’t what the group think at the Fed has been projecting. If the Fed doesn’t move on rates today, as appears to be the case, President Trump’s feelings about Jerome Powell heading the Fed may come to a head. This could be the most interesting “no decision" meeting in FOMC history.
Takeaway #3 Two Weeks
Ask any contractor how long a renovation project will take, and you’re bound to hear “two weeks”. It’s the oldest contractor joke in the book and that’s still said to people every day. Yesterday, while meeting with Canadian Prime Minister Mark Carney at the Oval Office President Trump said something particularly interesting when asked about trade. He said that within the next few days he’ll announce, “something very, very big ...like as big as it gets...one of the most important announcements that have been made”, (though he indicated it might not necessarily have to do with trade). Trump continued by saying: It is really, really positive. And that announcement will be made either Thursday or Friday or Monday... Trump also said that within next two weeks potentially as many as 100 trade deals could take place. In so many words he said that he’d pull the cabinet together to evaluate the state of trade deal by deal. That wasn’t a promise of outcomes, but it did afix a timeline to the president’s line of thinking about when he’s open to trade deals getting done. The question will be whether his guidance is more reliable than the average contractor’s timeline of things... Stand by for news.