Senator Elizabeth Warren issued a stark warning: If President Trump fires Federal Reserve Chair Jerome Powell, the US markets could face a major crash.
A Dangerous Precedent
In a recent CNBC interview, Warren argued that the independence of the Federal Reserve is crucial to market stability. She emphasized that the ability of a president to simply dismiss the Fed chair based on political pressure would severely undermine investor confidence. She painted a picture of a volatile market where decisions are swayed by the whims of a single person, rather than sound economic principles. This, she said, would make the US financial system look no different than that of an authoritarian regime.
Powell and Trump: A Tense Relationship
The tension between President Trump and Chair Powell is well-documented. Trump has repeatedly pressured Powell to lower interest rates, a move Powell has resisted, opting for a more cautious approach. Reports suggest Trump is exploring whether he even has the power to fire Powell.
The Bottom Line
Warren’s message is clear: The independence of the Federal Reserve is not just important for the US economy, it’s vital for global economic stability. Removing Powell due to political disagreements would send shockwaves through the financial world, potentially leading to a significant market downturn.
