Federal Reserve, send out a distress signal!
Recently, the U.S. stock market has been confused by the "war of words" between Trump and the Federal Reserve. Yesterday, Trump suddenly erupted, publicly attacking Federal Reserve Chairman Powell, which directly led to a collective plunge in the dollar, U.S. stocks, and U.S. bonds, while gold prices soared to $3,450 per ounce, indicating that the alarm has not yet been lifted, and global investors are playing the game of "selling off America."
The more the market falls, the steadier Powell’s position will actually be. If Trump were to dismiss Powell at this time, the whole world would question whether the U.S. financial system is still reliable. The Chicago Fed's Goolsbee urgently spoke out a few days ago, stating, "Anyone who messes with the independence of the Federal Reserve will see inflation take off, the economy stall, and the army of the unemployed take to the streets!" On Monday, he added on CNBC: "If the tariffs imposed by Trump only affect 11% of imported goods, that can still be considered manageable."
These frequent statements actually convey three layers of meaning: first, a direct rebuttal to Trump’s political pressure; second, a reassurance to the frightened market; third, a repeated emphasis that the Federal Reserve makes decisions based solely on economic data. However, no one believes Trump’s claim that "tariff negotiations are going smoothly"; everyone is now most afraid of him suddenly firing Powell.
Now Wall Street has collectively switched to "survival mode": 1. From previous optimism to frantic selling; 2. Investors are beginning to reevaluate the value of U.S. assets, this time not only calculating economic factors but also incorporating political interference and institutional risks into the pricing; 3. The most terrifying scenario is if Powell were indeed fired, that would definitely trigger an epic financial tsunami, and global funds might collectively flee from dollar assets.