Vanguard is practically synonymous with index investing. They have everything to gain from letting retail investors continue to believe the stock market is a free ride. Why would they cash that in for a one time profit gain?

I don't believe Vanguard trades for its own account.

Given their structure, I'm not sure how they could trade on their own account. IANAL, but they're a registered investment advisor and that status requires them to act as a fiduciary for their clients.

Plus, with their structure as a mutual company the firm is owned by its customers. Even if they did trade for themselves, the account would effectively be owned by all their customers, wouldn't it?

If there's any profit to be made from a market trend, that trend is more likely to be volatility than a downturn, as far as I can surmise. They make commission from trades that are made, and at scale that's a lot of profit. It's the same thing that keeps Coinbase profitable in that bear market. Of course I could be wrong, but generally you sometimes hear about the big shorting positions from big players. I don't recall Vanguard traders making the news, and I'm not sure they're involved in options, either.

If anything, this is an angle at manipulating the Fed into keeping rates low

> If the facts change — with, say, the Federal Reserve delaying anticipated interest-rate hikes in response to a weaker economy — the recession forecast will change, too, Mr. Davis said.

And this should highlight the absurdity of interest rates even being "set" in the first place.

That's just the way the Federal Reserve works. As long as they are around, they will loan money at interest rates that they set. Potentially they could get out of the money business and we could go back to using precious metals for money, but I don't know how you get there from here.