Trump once considered firing Powell and discussed it with some Republican lawmakers in a closed-door meeting. It is rumored that he even drafted a termination letter, but later publicly denied moving forward with the plan, stating it was 'extremely unlikely' unless Powell committed fraud. This news has triggered market turbulence, with the dollar and U.S. stocks dropping sharply, while gold and Bitcoin rebounded on the momentum (Wall Street Journal).
Wall Street executives collectively expressed support for Powell's independence. Several big names, including the CEOs of Goldman Sachs and Bank of China, emphasized that the Federal Reserve must remain politically independent. They warned that if the president intervenes in monetary policy, it would severely undermine market confidence (Securities Times).
The government has begun preparations for Powell's successor after his term ends in 2026. Treasury Secretary Basant confirmed that the process of selecting a successor has started, but it has not yet been decided whether to replace him early (Radio France Internationale).
The Supreme Court ruled that the president does not have the authority to replace Powell simply due to policy disagreements. This means that if the president insists on moving forward, he will face significant legal challenges (Reuters).
🧭 Market and Policy Impact Analysis
Short-term market volatility is evident.
When the notion of Powell being 'fired' emerged, the stock market plummeted, the dollar depreciated, and gold and cryptocurrencies like BTC rebounded. However, after Trump denied it, the market quickly stabilized (Wall Street Journal).
Increased focus on the independence of the Federal Reserve.
Wall Street views Powell as a key figure in safeguarding the stability of monetary policy, with several big names publicly emphasizing that a Federal Reserve free from political interference is crucial for economic growth and inflation control.
Policy direction requires close attention.
Whenever the president pressures Powell, creating uncertainty in the market, it can influence bond yields, dollar trends, and investor confidence. If there is a fixation on presidential intervention rhetoric, future interest rate trends may become more cautious.
This uproar superficially stems from Trump's dissatisfaction but actually reflects a deep test of the Federal Reserve's independence.
♂️ If you hold risk assets (such as U.S. stocks, bonds, BTC, etc.), it is advisable to pay attention to Federal Reserve statements and Powell's own speeches.
In the medium to long term, Powell may maintain independence during his term, and significant policy adjustments will require statutory procedures and evidence. However, market sentiment remains highly sensitive, and short-term volatility risks are still present.
