① Democratic Senator Elizabeth Warren warned that if Trump has the power to fire Federal Reserve Chairman Powell, the US market will "collapse"; ② Warren emphasized that the independence of the Federal Reserve is crucial for economic stability.
On April 18, the Financial Association reported (Editor: Huang Junzhi) that senior Democratic Senator Elizabeth Warren warned on Thursday that if President Trump has the power to fire Federal Reserve Chairman Jerome Powell, the US market will "collapse."
Warren acknowledged in her speech at the New York Stock Exchange, "I often clash with Powell over regulatory and interest rate issues. But make one thing clear: if Chairman Powell is fired by the President of the USA, the US market will collapse."
She pointed out that the "infrastructure" supporting the stock market and even the global economy is the idea of "large institutions (the Federal Reserve) being independent of politics." If key economic levers are "subject to a president who just wants to wave a magic wand," the USA would be no different from "any other second-rate dictatorship in the world."
Just hours before she made the above comments, Trump posted on Social Media that the speed of Powell's dismissal is not fast enough.
He wrote, "Jerome Powell of the Federal Reserve is always too slow to respond and often makes mistakes. He issued a report yesterday that is another typical, complete mess!"
Trump also stated that the sooner Powell is dismissed, the better, as he believes the Federal Reserve should cut interest rates more aggressively, like the European Central Bank. Yet Powell seems unaffected by Trump's radical tariff policies.
Earlier on Wednesday, Powell delivered the latest remarks, stating that the Federal Reserve will wait for more economic data before considering adjusting interest rates. However, he warned that President Trump's tariff policy could lead to higher inflation and higher unemployment rates, which may force the Federal Reserve to prioritize which battle to fight.
However, there is no precedent to determine whether the president has the authority to dismiss the chair of the Federal Reserve. Trump himself is quite confident, stating in the Oval Office at the White House on Thursday that he believes he has the authority to remove Powell. He said, "If I want him out, he'll be out immediately, believe me."
Powell has repeatedly stated that the president does not have the authority to dismiss him. Moreover, six years ago, he made it clear that if his position were challenged, he would fight back through legal means.
The senior management of the Federal Reserve has also prepared for this situation, meaning that if Powell's position as chair of the Federal Reserve is challenged, the Federal Open Market Committee (FOMC), which is responsible for setting interest rates, will immediately convene to re-elect Powell as the chair of the committee.
On Wednesday, Jeff Schmid, president of the Federal Reserve Bank of Kansas City, also spoke in a live stream about the importance of the Federal Reserve's political independence, stating that it allows Federal Reserve decision-makers to focus solely on the financial and economic stability of the USA when setting interest rates.
Trump's aides hurriedly sought to clarify the situation afterward. A senior White House official later told the media that Trump's strong criticism should not be interpreted as a threat to dismiss Powell, and there are currently no plans to end his term early.
Editor/danial
