If you’re old enough to remember 2018, the year Jerome Powell took the reins at the Fed, you know it wasn’t so long ago when Donald Trump’s public disdain for the man he chose to replace Janet Yellen was a source of acute market consternation.

On Christmas Eve of that year, for example, Trump took to Twitter to liken Powell to a golfer who can’t putt. Quaint as this sounds by today’s standards, that counted as an intolerable encroachment on central bank independence, and it was traded as such by US equities.

Fast forward seven years and Fed derision’s just par for the course. On Tuesday, Trump called Powell “incompetent” and “crooked” and then demanded “meaningful” rate cuts. So desensitized are traders and investors to this by now that even the (wildly absurd) prospect of a criminal indictment for Powell failed to move markets early this week.

But the blasé reaction isn’t all down to the autocratic desensitization process described here on Monday. There’s also an argument to be made that monetary policy has at this point taken a backseat.

“I kinda ‘get’ why the market isn’t really voting with its feet as if this is some sort of new information to reposition or reset thinking around,” Nomura’s Charlie McElligott said Tuesday, commenting on the Powell soap opera. “The bigger picture on why this hasn’t been viewed as much of a risk event is due to the market having already wrapped its head around the magnitudes-more-critical fiscal dominance theme.”

He mentioned Trump’s avowed determination to run it hot, so to speak, particularly with the mid-terms approaching. To reiterate from last week: The Atlanta Fed’s popular GDPNow tracker tips a >5% real growth rate for Q4.

Although that “nowcast” is a bit misleading, and notwithstanding that US hiring absolutely downshifted last year, the fact remains that the US economy isn’t anywhere near rolling over.

“Let’s keep it 100 here,” Charlie exhorted. “US nominal GDP is an 8%-handle, and that’s the world that corporates operate within.”

True indeed, and that’s the backdrop for earnings season, which is very likely to suggest that for all the sturm und drang, corporate profits are in fine fettle.

The chart above’s a reminder you scarcely need: Corporate margins remain at or near record highs a full two points above the pre-pandemic peak.

At the same time — and recent hawkish FOMC dissents aside — there really isn’t much in the way of determined pushback on the Fed’s plain-as-day inclination to protect labor market downside versus guarding against upside inflation risk.

In other words: Even before Trump began the ongoing process of remaking the Committee in the MAGA image, policy was asymmetrically biased to the dove side.

“Monetary policy is practically missing half of its possible distribution of outcomes, with almost universal cynicism of central bank willingness to take the pain of inflation fighting instead of growth prioritization in this economic populism era,” McElligott went on, adding that while “the Powell stuff is ultra lame and not credible, it’s not really what matters now [as] central bankers setting policy rates plus or minus 100bps simply doesn’t have the attributional impact it once held when we’re on a permanently larger fiscal deficit spending trajectory.”