President Trump is not changing ***; he is piercing the "Dinghai God Needle" of the stock market!
This move is not just premeditated; it's a blatant "political palace coup."
The timing is ruthless.
Trump chose to drop the news after the market closed on Friday for a reason. He knows that if he stirs the pot too much, the market will plunge directly. But this time, he let the news ferment over the weekend, giving Wall Street a bit of "cooling time" so it doesn’t crash the very same day. Stabilizing the index but scaring the emotions—quite shrewd!
Powell is directly sidelined.
The Federal Reserve Chairman's term lasts until February 2026; it's still early. But Trump is prematurely calling for a "change" two years in advance, which is like putting Powell on the grill early. You still want to pretend to be independent? Sorry, what I want is obedience.
The toolman is being scheduled.
Trump has no sense of independence; what he wants is a "tool" that can cooperate with his election-year 100 basis points of major easing. Last night he just shouted, "Quickly cut by 100 basis points," and this morning he threatened to change leadership. This is not a test; it’s a warning.
The foundation of trust in the stock market is shaken.
Think back to 2018 when Trump threatened to fire Powell; the U.S. stock market fell 5% in a week. This time the situation is worse:
The Federal Reserve could be internally torn apart, and forward guidance could directly become invalid;
If the new chairman can't be hawkish enough or dovish enough, the market will completely lose its anchor.
Don’t forget, today’s inflation is no small issue; changing leadership and messing up expectations is like a series of explosions.
