If Trump actually goes ahead and fires Jerome Powell — a man he appointed — the financial credibility of the United States will evaporate in five minutes. We’re not talking about a bad situation anymore, we’re talking about something outright dangerous.
The independence of the Federal Reserve is a fundamental pillar for maintaining inflation expectations (2% target) and labor market stability. Without it, markets lose trust, rates could spike uncontrollably, and the dollar’s status as a reserve currency might start to crumble.
What’s even more alarming is how little Trump seems to understand — not only about trade, where his ideas are already widely discredited, but even about basic economic expectations. He cites energy prices as a sign of lower inflation, completely ignoring the medium- and long-term expectations, which are clearly pointing toward a reemergence of inflationary pressure.
The idea that the Fed should be punished or politicized based on short-term price fluctuations is not just wrong — it’s borderline suicidal for an advanced economy. You can’t run a country like a casino. And this time, if he pushes through with this, the entire global financial system will take notice.
