What if the American president decides to dismiss Jerome Powell? According to Senator Elizabeth Warren, that is asking for problems. In a candid interview with CNBC, the Senator from Massachusetts did not let grass grow about it: confidence in the financial markets would collapse completely.
Banana republic
“If chairman Powell is just fired by the president, you can expect a crash,” warns Warren. She is seriously worried about the consequences, and that is not without reason.
According to her, the resignation of Powell would create a dangerous precedent. According to Warren, the Federal Reserve (FED), or the US Central Bank, must be able to operate independently, regardless of political pressure. “If the interest rates are determined by a president with a magic wand, then we are no longer democracy, but we look like a banana republic,” she warns sharply.
Does Trump go around the law?
From a legal point of view, President Trump may not just dismiss Powell. But according to Elizabeth Warren, that is no guarantee that he will not try anyway. She simply does not trust that Trump adheres to those legal limits.
There have been rumors for some time that many of Trumps antics are consciously meant to get Powell away. For example, he would deliberately reduce the markets, for example by entering higher levies, in order to put pressure on the Federal Reserve. The idea? Get the central bank to lower interest rates. And that in turn could have a positive effect on risky investments such as shares and Bitcoin (BTC). A daring strategy, but not unthinkable in the game of political influence.
The separate thing is that the president does not hide this wish. On his own Truth Social, he sent another post in which he publicly announced that he wanted to fire Powell.
Yesterday you could even read that Trump has even discussed the former Fed Governor Kevin Warssh as a possible successor. This has caused division in the White House and fueled the fear that political interference is getting closer.
Source: https://newsbit.nl/senator-warren-waarschuwt-ontslag-powell-is-recept-voor-beursramp/
