Recent news surrounding the Federal Reserve raises questions about the potential resignation of Chair Jerome Powell. Discussions about his political maneuvers have intensified amid repeated calls from President Trump for interest rate cuts.
Political Pressure on Powell
Since the elections in December, the Federal Reserve has ceased its interest rate cuts. This halt has sparked debates over alleged political maneuvers by Chair Powell. Trump has publicly claimed that Powell initiated rate cuts to save the Democratic Party. Nevertheless, Trump continues to express support for Powell until the end of his term.
Possible Resignation of Fed Chair
Recent media reports indicate a potential resignation of Powell. According to sources, three Fed members hinted at possible rate changes in July, signaling internal disagreements. These rumors were further fueled by comments from the Chairman of the Federal Housing Finance Agency regarding potential changes in Fed leadership. White House officials have indicated that a draft for Powell's removal is being prepared.
Economic Implications
Market liquidity is demonstrating instability. The dollar index has fallen to 98, the S&P 500 has dropped to 6,220, and Bitcoin has tested the $119,000 mark. The resilience and independence of the central bank are questioned if Powell is replaced by a more compliant chair.
Upcoming events surrounding the potential removal of Powell from the Fed raise questions about the future independence of the U.S. financial system. Observing the situation's evolution and its impact on the economy is crucial.
