Trump calls for 'replacing Powell'? This power struggle may shake global asset prices!
Trump has again turned the heat on the Federal Reserve, stating that he will soon decide Powell's fate. This move is not just talk; it seems more like a prelude to reshaping the financial power structure of the United States.
He thinks Powell is acting too slowly, as Europe has already cut interest rates while the Federal Reserve is still going in circles.
There are rumors that former Federal Reserve Governor Kevin Warsh is a popular successor; this guy advocates for more flexible monetary policy, which means, to put it simply: listening more to the White House.
Even more intense is that the Trump administration is appealing to the Supreme Court, trying to gain the authority to 'directly fire Powell.' If successful, the independence of the Federal Reserve could be directly undermined.
How should the market view this?
In the short term, expectations for interest rate cuts are rising, and both cryptocurrency exchanges and the stock market may see a surge.
But in the long term, if monetary policy becomes politicized, both the credibility of the dollar and market stability will be compromised, and international investors may not be convinced either.
