Trump plots to remove Powell? Fed's "change of leadership" storm draws market attention
According to market news, President Trump has recently discussed the possibility of dismissing Fed Chairman Powell in multiple private occasions, which has attracted strong attention from the political and economic circles.
According to the news, when Trump met with former Fed Governor Kevin Warsh at Mar-a-Lago, he not only discussed the plan to remove Powell in advance, but also directly considered letting Warsh take over this important position.
It is worth noting that Warsh himself seems to have reservations about this "change of leadership" plan. According to people familiar with the matter, the potential successor had suggested that Trump maintain the independence of the Fed and let Powell complete his term until 2026.
But Trump made it clear at the Oval Office meeting on Thursday: "If I want him to step down, he will step down soon, believe me." This tough statement shows that the president's dissatisfaction with the current Fed policy has reached a critical point.
This political game may trigger a constitutional crisis. Legal experts pointed out that any unilateral move to remove the Fed chairman will face judicial review by the Supreme Court. What is more worrying is that this unprecedented potential "central bank personnel earthquake" may bring severe fluctuations to the global financial market.
At present, both the White House and Warsh have declined to comment, but Wall Street has begun to assess the impact of this political turmoil on the direction of monetary policy. The market is nervously watching.
Conclusion:
Although Trump's "change of leadership" remarks may only be his signature political intimidation, if it is really implemented, it will set a dangerous precedent for government intervention in monetary policy.
At the same time, it is worth noting that since the establishment of the Federal Reserve in 1913, its independence has always been the cornerstone of the stability of the US economy. The government has no right to replace the central bank governor due to policy differences. This is precisely to prevent monetary policy from becoming a political tool.
Therefore, when the short-term demands of the elected government conflict with the long-term economic functions of the central bank, can the institutional design hold the bottom line? The outcome of this game may redefine the power boundary between the US government and the Federal Reserve.
However, for global investors, the most important thing to pay attention to now is not only whether Powell will stay or go, but whether the "firewall" of the independence of the US central bank will be permanently weakened.