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Capital Economics: Trump's firing of Powell will impact the market, new chairman unlikely to cut interest rates as desired
Summary: In response to rumors, Stephen Brown, North American Deputy Chief Economist at Capital Economics, pointed out in a report that Wednesday's market reaction indicated how investors might respond if Trump follows through on his threat to fire Federal Reserve Chairman Powell. Brown suggested that in such a scenario, the dollar, stocks, and short-term bond yields ...
In response to rumors, Stephen Brown, North American Deputy Chief Economist at Capital Economics, pointed out in a report that Wednesday's market reaction indicated how investors might respond if Trump follows through on his threat to fire Federal Reserve Chairman Powell. Brown suggested that in such a scenario, the dollar, stocks, and short-term bond yields could fall, while long-term yields may soar. Trump has dismissed reports of attempting to fire Powell, calling it 'highly unlikely.' However, the new Federal Reserve chairman is likely to be announced well before Powell's term ends in May 2026. Brown emphasized that even with a change in leadership, the Federal Reserve is highly unlikely to cut interest rates by 300 basis points as Trump has called for.
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Link: Capital Economics: Trump's firing of Powell will impact the market, new chairman unlikely to cut interest rates as desired [Copy]
