U.S. Senator Warns Sacking Fed Chief will cause Market Crash
U.S. Senator Elizabeth Warren cautioned that a financial crisis could arise from President Donald Trump's eventual attempt to remove Federal Reserve Chair Jerome Powell,
Quick overview
- Senator Elizabeth Warren warned that President Trump's attempt to remove Federal Reserve Chair Jerome Powell could lead to a financial crisis.
- Warren emphasized that the President does not have the legal authority to fire Powell and expressed distrust in Trump's adherence to legal norms.
- She stated that firing Powell would undermine investor confidence and potentially collapse the markets.
- Warren highlighted the importance of political independence in maintaining the stability of the US financial system.
U.S. Senator Elizabeth Warren cautioned that a financial crisis could arise from President Donald Trump’s eventual attempt to remove Federal Reserve Chair Jerome Powell, as this would erode investor trust in the stability of the US capital markets.
The top-ranking US Senator added that she does not trust the President to follow legal tradition, even though she acknowledged the President does not have the legal authority to fire Powell.
The Massachusetts senator stated that the President lacks the legal power to remove Powell during an appearance on CNBC. Warren further asserted that firing Powell would jeopardize the US financial system, saying,
“If the President of the United States can fire Chairman Powell, it will cause the markets to collapse.” The notion that the major components operate independently of politics is the foundation sustaining the strength of this stock market and, consequently, a significant portion of our economy and the global economy. Warren continued,
“This doesn’t distinguish us from any other two-bit dictatorship if interest rates in the United States are subject to a president who simply wants to wave his magic wand.” President Trump has repeatedly demanded his dismissal due to Powell’s reluctance to cut interest rates,
Lower interest rates, which are generally viewed as a positive catalyst for risk-on asset prices, including cryptocurrencies, have the potential to reverse the market decline brought on by the trade wars and current macroeconomic pressures.
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