Elizabeth Warren Warns Firing Jerome Powell Could Trigger Market Collapse
U.S. Senator Elizabeth Warren has issued a stark warning regarding the potential consequences if former President Donald Trump follows through on threats to dismiss Federal Reserve Chair Jerome Powell. Speaking during a CNBC appearance, the Massachusetts Democrat emphasized that such a move would not only be legally questionable but could also severely damage the credibility of U.S. financial institutions and lead to a significant market crash.
According to Senator Warren, the President does not possess the legal authority to remove the head of the Federal Reserve without cause. She stressed that the independence of the Federal Reserve is a cornerstone of the U.S. financial system and global economic stability. Undermining that independence, she said, would erode investor confidence and weaken the financial infrastructure.
“If Chairman Powell can be fired by the President of the United States, it will crash the markets,” Warren stated. “The infrastructure that keeps this stock market strong—and therefore a big part of our economy strong, and a big part of the world economy strong—is the idea that the big pieces move independently of politics.”
Warren further explained that if interest rate decisions were manipulated by political motives, the United States would lose its distinction as a stable, rule-based economy. “If interest rates in the United States are subject to a president who just wants to wave his magic wand, this doesn’t distinguish us from any other two-bit dictatorship,” she warned.
Ongoing Tensions Between Trump and Powell
The tension between Donald Trump and Jerome Powell has been long-standing. The former President has consistently criticized Powell’s reluctance to cut interest rates, arguing that more aggressive monetary easing would boost asset prices and stimulate economic growth. In particular, Trump has pointed to Powell’s rate stance as a barrier to stronger performance in both traditional equities and risk-on assets such as cryptocurrencies.
On April 17, Trump reignited controversy by calling once again for Powell’s removal in a Truth Social post. The post intensified speculation that he might attempt to sideline the chairman through unconventional or potentially illegal means.
Support from Within the GOP
Trump’s stance has found support among other Republican lawmakers, including Senator Rick Scott. In an op-ed published on Fox News, Scott advocated for sweeping changes at the Federal Reserve. “It’s time to clean house of everyone working at the Federal Reserve who isn’t on board with helping the American people and fighting for their best interests,” he wrote.
The Trump administration has made it clear that pushing for lower interest rates remains a central focus. Some market analysts, including prominent investor Anthony Pompliano, have even speculated that Trump might manipulate market conditions to pressure the Fed into cutting rates.
Pompliano pointed to a past dip in the 10-year U.S. Treasury Bond yield to just 4% as evidence. Since then, however, the yield has rebounded to 4.3%, reflecting ongoing uncertainty in the macroeconomic environment.
