Initially CBS reported that President trump spoke to a group of GOP lawmakers about firing Fed Chair Powell (and markets reacted modestly), but now Bloomberg reports that a White House official confirms Powell’s outser is imminent.
While the lawmakers voiced support for the move, which would likely roil financial markets and lead to a consequential legal showdown, Trump has not made a final decision and could change his mind, according to the official who requested anonymity to discuss a private conversation.
In seeking to fire him, Trump would test the legal bounds of his authority over the central bank and independent federal agencies more broadly.
In recent days, Trump has lambasted Powell over renovations at the central bank that the president and his allies have seized on, arguing that the work has been plagued by cost overruns and is exorbitantly lavish for a government office building. Trump suggested that the renovation costs were “pretty disgraceful.”
Asked if it was a fireable offense by reporters on Tuesday, Trump responded “I think it sort of is,” but stopped short of saying he planned to push out the Fed chief over the flap.
“I think he’s a total stiff, but the one thing I didn’t see him as is the guy that needed a palace to live in,” Trump said.
Anna Paulina Luna, a Florida Republican who was among the holdouts on the cryptocurrency bill, wrote on social media that she was “Hearing Jerome Powell is getting fired! From a very serious source.”
In a later post, she wrote, “I’m 99% sure firing is imminent.”
The reaction was swift with stocks tumbling..,.
The bond market is swinging wildly with the shoret-end bid and long-end yields oaring (major steepening)
Rate-cut expectations are spiking…
Gold soaring…
And bitcoin bid…
“If Trump fires Powell and puts someone in place to bully the Fed into cutting rates, the bond market would react poorly to that — it would sell off and yields would go up,” said Jim Bianco, president and macro strategist at Bianco Research.
“We’ve already seen an example” of what might happen, he said, pointing to the jump in 10-year Treasury yields in late 2024 that came alongside Fed rate cuts. The market was “basically saying to the Fed you have the wrong policy — the economy doesn’t need extra stimulus. That’s what would happen now.”
Market chaos is certainly a decent distraction from the Epstein ‘hoax’?
Loading…
