deVere Group<\/a>.<\/p>\n\u00a0<\/p>\n
Nigel Green comments: \u201cTrump knows markets would go into freefall if he fired Powell. Investors would dump risk assets instantly. This isn\u2019t just about interest rates; it\u2019s about credibility, institutional independence, and global trust.\u201d<\/p>\n
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Futures trading makes the stakes clear. S&P 500 futures are flat. Nasdaq 100 futures are marginally positive, up 0.22%.<\/p>\n
\u00a0<\/p>\n
However, futures tied to the Dow Jones Industrial Average are already 0.29% lower \u2014 a hint of the anxiety building in the system. Markets are watching closely, and they\u2019re on edge.<\/p>\n
\u00a0<\/p>\n
\u201cAny attempt to oust Powell could unleash volatility not seen since the financial crisis,\u201d says Nigel Green.<\/p>\n
\u00a0<\/p>\n
\u201cThis would send the dollar into a tailspin, push bond yields higher, and spook equities across all sectors. The ripple effect would likely hit every market \u2014 from New York to London to Tokyo.\u201d<\/p>\n
\u00a0<\/p>\n
Trump has long voiced his discontent with Powell, particularly when interest rates haven\u2019t matched his political timetable.<\/p>\n
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But Powell is no stranger to White House pressure. What\u2019s changed is the stage, with Trump now physically inserting himself into the Fed\u2019s orbit, which is a move designed to unsettle, distract, and provoke.<\/p>\n
\u00a0<\/p>\n
However, markets aren\u2019t easily manipulated, and they respond most fiercely to threats against institutional stability.<\/p>\n
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\u201cThe Fed\u2019s independence is one of the few things left that gives investors confidence that the system works,\u201d Nigel Green continues.<\/p>\n
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\u201cIf Trump tried to strip that away, especially with the economy still digesting years of inflation, investors would react with fury.\u201d<\/p>\n
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There\u2019s also a legal firewall. While the US president can technically remove a Fed Chair \u201cfor cause,\u201d Powell\u2019s tenure, which runs through May 2026, is protected by precedent and political calculation.<\/p>\n
\u00a0<\/p>\n
\u201cTo terminate him without due process would ignite a constitutional crisis, not just a market one.\u201d<\/p>\n
\u00a0<\/p>\n
Trump may crave looser monetary policy, especially as inflation moderates and markets price in more rate cuts for 2025, although even a dovish pivot doesn\u2019t justify a full-scale assault on central bank leadership.<\/p>\n
\u00a0<\/p>\n
\u201cThe irony is, Powell is already moving in the direction Trump wants,\u201d says Nigel Green.<\/p>\n
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\u201cRate cuts are likely coming, inflation is decelerating, and growth is holding. This isn\u2019t 2018. Trump doesn\u2019t need to stage a coup at the Fed. He needs to let the system work.\u201d<\/p>\n
\u00a0<\/p>\n
Markets have long memories. After Nixon pressured the Fed in the 1970s, inflation ran out of control. After Trump fired FBI Director James Comey, markets were rocked. Any repeat with the Fed Chair, particularly under circumstances viewed as overtly political, would \u201cdamage US economic credibility on the world stage,\u201d notes the deVere CEO.<\/p>\n
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Already, foreign investors are sensitive to signs of institutional weakness. Any perception that the Fed is under direct political control could lead to a divestment of US assets, weakening the dollar and making financing government debt more expensive.<\/p>\n
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\u201cIf Powell is removed, the fallout would be instant,\u201d Nigel Green warns. \u201cIt would create a panic premium in markets. Investors would demand higher yields to hold US debt. Stocks would be slammed. And America\u2019s financial leadership would be shaken \u2014 not just short-term, but longer-term too.\u201d<\/p>\n
\u00a0<\/p>\n
While the optics of a White House visit to the Fed may satisfy Trump\u2019s need to project dominance, the substance tells a different story. He can rattle the cage. But he won\u2019t break it, because the costs could be catastrophic.<\/p>\n
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\u201cThe market is calling his bluff,\u201d concludes the deVere chief executive.<\/p>\n
\n\t\t\t\t Post Views: 1
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