#PowellVsTrump The ongoing feud between US President Donald Trump and Federal Reserve Chair Jerome Powell centers around Trump's frustration with Powell's stance on interest rates. Trump wants lower rates to boost the economy, while Powell prioritizes controlling inflation.

*Key Points:*

- *Trump's Criticism:* Trump has publicly criticized Powell, calling him "terrible" and suggesting he should be fired. He even drafted a letter terminating Powell's position as Fed Chair and discussed it with Republican lawmakers.

- *Powell's Position:* Powell maintains that the Fed will remain "data-dependent" and make decisions based on economic indicators, not political pressure.

- *Potential Consequences:* Experts warn that if Trump succeeds in pressuring Powell, it could lead to ¹ ²:

- *Higher Inflation:* Lower interest rates could fuel inflation, which Trump's policies are already expected to drive up due to global tariffs and increased deficit spending.

- *Market Instability:* The potential firing of Powell has already caused market jitters, with the US Dollar Index falling and yields on long-term Treasury bonds rising.

- *Loss of Fed Independence:* Trump's attacks on Powell undermine the Fed's independence, which is crucial for effective monetary policy.

*Reactions from Lawmakers:*

- *Republican Senators:* Some Republican senators, including Louisiana's John Kennedy and North Carolina's Thom Tillis, have warned that firing Powell would be a "colossal mistake" and could trigger market crashes.

- *Support for Fed Independence:* JPMorgan Chase CEO Jamie Dimon and other prominent financial leaders have also expressed support for the Fed's independence ².