Democrat Senator Elizabeth Warren of Massachusetts says that the US markets will witness another meltdown if Fed Chair Jerome Powell loses his job because of President Trump.
In a new interview on CNBC Squawk Box, Warren says that it would be disastrous for US markets if Trump somehow manages to force Powell out.
“If Chairman Powell can be fired by the president of the United States, it would crash the markets in the United States. The infrastructure that keeps this stock market strong and therefore a big part of our economy strong, and therefore a big part of the world economy strong, is the idea that the big pieces move independent of the politics, that somebody is making their best decisions economically and independently.
We understand that if the New York Stock Exchange, if interest rates in the United States are subject to a president who just wants to wave his magic wand, this doesn’t distinguish us from any other two-bit dictatorship around the world where everyone knows what your really big investment risk is will that dictator wake up in the morning and have a tummy ache and decide to cause this problem, or favor that friend?
That’s why we need to strengthen the infrastructure.”
Recently, Reuters reported that Trump is “studying” to see if he can fire Powell, who has served as the Fed Chair since 2018 and was appointed by Trump during his first term. Despite being Trump’s appointee, Powell’s relationship with Trump has been strained as of late due to conflicts in interest rate outlook.
Trump wants the Fed to immediately cut interest rates, but Powell has determined that the right course of action is to be patient and keep rates steady.
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