Donald Trump aims to remove Jerome Powell from the Federal Reserve before his term concludes in May 2026. His potential replacements, including Bessent and Warsh, are expected to support lower interest rates.
This anticipated change could trigger market instability, legal disputes, and a ‘Shadow Fed’ situation, influencing investor confidence and Fed policies before the new appointment is confirmed.
With Powell backed by Congress, any abrupt dismissal could lead to prolonged legal battles, hindering the Fed’s operations and risking damage to the credibility of the central bank amidst rising inflation expectations.
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