Trump Threats, Fed Feuds Fail to Break Markets as Logic Prevails

Not long ago, Donald Trump could rattle Wall Street for days with a single post. Now, he threatens to oust the world’s most powerful central banker, and Treasury yields barely twitch. Stocks continue their steady climb. Haven assets hardly stir.

This quiet isn’t simply the result of summer trading lulls, it reflects something deeper. For all the political noise and recession warnings, the US economy refuses to buckle — and markets, against the odds, are behaving rationally.

One way to see this is through the lens of cross-asset correlations: the degree to which equities, bonds, credit and commodities move in ...