US Senator Elizabeth Warren warned that if President Donald Trump finally moves to fire Federal Reserve Chairman Jerome Powell, it could undermine investors’ confidence in the integrity of the U.S. capital markets and cause a financial crash.
When he appeared on CNBC, the Massachusetts Senator said the president had no legal authority to remove Powell from his position. Additionally, Warren added that removing Powell would weaken US financial infrastructure.
“If Chairman Powell is fired by the US President, the market crashes. This infrastructure that keeps the stock market strong will keep most of our economy strong and most of the global economy strong.
“If US interest rates are targeted by a president who just wants to swing a magic wand, this doesn’t distinguish us from other two-bit dictatorships,” Warren continued.
President Trump has repeatedly called for Powell to fire, citing his chairman’s reluctance to lower interest rates. Low interest rates are usually seen as a positive catalyst for risk-on asset prices, including cryptocurrencies, and could reverse the market slump brought about by trade wars and current macroeconomic pressures.
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Trump’s feud with the Federal Reserve Chairman
Trump criticized Powell for not cutting interest rates and called for his fire once again on the Truthful Social Post on April 17th.
Senator Rick Scott reflected Trump’s call for removal of Powell. “Now is the time to clean up the homes of everyone working in the Federal Reserve who is not involved in helping the American people and fighting for their best interests,” Scott wrote in an opinion piece published in Fox News.
The Trump administration has repeatedly said lower interest rates are a top priority. Market analyst and investor Anthony Pipriano recently speculated that Trump intentionally crashed financial markets to force interest rates.
At the time, Pipriano said he had cut the yield on U.S. Treasury bonds to just 4% for the 10-year period. The 10-year bond yield has since returned to 4.3%.
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