Warren Warns: Firing Powell Could Crash Markets

Senator Elizabeth Warren issued a stark warning: removing Federal Reserve Chair Jerome Powell could severely damage investor confidence and trigger a market crash. During a CNBC appearance, she emphasized the President's lack of legal authority to dismiss Powell and highlighted the crucial role of the Fed's independence from political influence.

Warren stated, "If Chairman Powell can be fired by the President, it will crash the markets. The strength of our stock market, and a significant portion of the global economy, relies on the perception of the Fed's independence from politics."

She further argued that subjecting interest rates to the whims of the President would undermine the US's financial stability, stating, "If interest rates are subject to a president who just wants to wave his magic wand, this doesn't distinguish us from any other two-bit dictatorship."

Trump's Feud with the Federal Reserve

President Trump has repeatedly called for Powell's dismissal, citing Powell's reluctance to lower interest rates. Lower rates are generally seen as beneficial for risk assets, including cryptocurrencies. This conflict intensified with an April 17 Truth Social post reiterating his desire for Powell's removal.

Senator Rick Scott echoed Trump's sentiments, advocating for a complete overhaul of the Federal Reserve's leadership. This echoed in a Fox News opinion piece.

Market Reactions and Speculation

Market analyst Anthony Pompliano speculated that Trump might have intentionally destabilized the market to pressure the Fed into lowering interest rates. While the 10-year US Treasury Bond yield briefly dropped to 4%, it has since rebounded to 4.3%.

The potential consequences of removing Powell extend beyond traditional markets. The uncertainty surrounding the Fed's leadership could significantly impact investor sentiment across all asset classes, including cryptocurrencies. Maintaining the Fed's independence is critical for ensuring market stability and fostering confidence in the US financial system.

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Warren Warns: Firing Powell Could Crash Markets