Jerome Powell's position as chairman of the Federal Reserve is under scrutiny due to economic forecasts and political intrigues.
Bureaucratic Struggles and White House Dynamics
Republicans are questioning Powell's legitimacy, with one representative even filing a criminal complaint with the Department of Justice. Discussions surrounding allegations of fraud linked to recovery processes are trending. Trump's statements in defense of Powell suggest that creating justification for potential removal is critical.
Economic Outlook for the U.S. from Fitch Ratings
Fitch Ratings issued a report warning of a slowdown in U.S. economic growth. According to the agency, business and consumer confidence have weakened amid bureaucratic tensions. Fitch revised its 2025 GDP growth forecast from 1.2% to 1.5%, though a slowdown is expected as the year progresses.
Market Impacts and Potential Consequences
Experts express concerns that the new tax law, enacted at Trump's insistence, might increase the debt-to-GDP ratio to 135% by 2029. Default rates on U.S. high-yield bonds and leveraged loans are expected to rise to 4.0-4.5% and 5.5-6.0%, respectively, later this year.
In light of the current situation, Jerome Powell's position appears increasingly vulnerable, with the influence of political dynamics on the U.S. economy requiring careful analysis.
