The political climate surrounding the Federal Reserve (Fed) is intensifying amid criticism of Chair Jerome Powell. His actions and potential consequences are under scrutiny.
Pressure on Powell
Tensions rise as Trump accuses Powell of political bias. The President claims that the decision not to lower interest rates was aimed at helping the Democratic Party ahead of elections. Trump has openly criticized Powell on social media, calling for immediate rate cuts and condemning the expenses on the Fed's renovation.
Speculations on Possible Resignation
Last week, speculation about Powell's potential resignation grew, fueled by comments from three Fed members suggesting possible rate cuts in July. These rumors intensified when the Chair of the Federal Housing Finance Agency spoke on Powell’s rumored departure. Meetings at the White House reportedly included discussions about drafting a plan for his removal, though no specific timeline has been established.
Economic Consequences
If Powell were to be replaced, several pressing questions arise: how will the Fed maintain market stability under new leadership? What impact would this have on the Central Bank’s independence? Economic indicators show current instability, with the dollar index falling to 98 and the S&P 500 declining to 6,220, alongside fluctuations in Bitcoin around $119,000.
The situation surrounding Jerome Powell continues to impact financial and political markets, with all eyes on how developments will unfold in the coming weeks.
