Capital Economics: Trump Firing Powell Would Shock Markets, and a New Chair Would Not Deliver the Desired Rate Cuts

Odaily Planet Daily – Stephen Brown, Deputy Chief North American Economist at Capital Economics, noted in a report that Wednesday’s market reaction suggests how investors might respond if Trump follows through on his threat to fire Federal Reserve Chair Jerome Powell. Brown stated that in such a scenario, the US dollar, stocks, and short-term bond yields could decline, while long-term yields might surge. Trump has dismissed reports that he intends to fire Powell, calling it “highly unlikely.” However, the new Fed chair is likely to be announced well before Powell’s term ends in May 2026. Brown emphasized that even with a change in leadership, it is extremely unlikely the Fed would cut rates by 300 basis points as Trump has called for. (Jin10)