$ETH
🏛️ What’s happening now?
July 16–17, 2025: Trump privately floated firing Fed Chair Jerome Powell and even showed a draft dismissal letter to GOP lawmakers. He criticized Powell for not cutting interest rates fast enough and for the Fed’s costly $2.5 billion HQ renovation .
Public response: Within 24 hours, Trump publicly backtracked, saying it’s “highly unlikely” he’ll fire Powell unless for fraud .
Market reaction: The initial firing rumors triggered a sharp sell-off—stock indices dipped, the dollar fell, and Treasury yields jumped—before stabilizing once Trump walked it back .
Political pushback: Prominent Republicans (e.g. Senators Thom Tillis, John Kennedy) and financial leaders (Jamie Dimon, JPMorgan CEO) warned that such a move would undermine the Fed’s independence and unsettle markets .
---
📌 Why it matters
Implication Details
Fed Independence US law allows firing only “for cause.” Overturning that sets a dangerous precedent .
Legal showdown Any attempt to remove Powell could lead to historic Supreme Court litigation .
Market stability Political meddling would disrupt investor confidence in US monetary policy, impacting inflation control, the dollar, and borrowing costs .