Equity and bond markets and the value of the US dollar will fall when President Donald Trump warned the chairman of the Federal Reserve, Jerome Powell, Senator Elizabeth Warren, on Thursday.
“I think they fall off,” said Warren, D-Mass.
Warren criticized Powell's decision -making in the past. But on Thursday she argued on Thursday that the tireless attacks by the President to the head of the central bank guide undermined the independence of the Fed, which is the key for us and global financial markets.
This independence “provides a signal for both our country and for the financial markets around the world” that someone is responsible “, which is supposed to carry out all economic data and then make a decision regardless of politics,” she said.
While the President appoints the FED chairman, “he sits in another box” than other cabinet officers, said Warren.
“He has different tools and should be independent and make these decisions,” she said about Powell. “In this case, I often do not agree to how he made these decisions, but independence itself is a value. It is a value for the United States and a certain value for our markets.”
“If Donald Trump destroys this, he brings these markets down,” said Warren. “He burns something valuable for the United States.”
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Warren's strong warning came when Trump enlarged his pressure campaign against Powell, whose persistent refusal to reduce interest rates this year made him one of the president's arch enemies.
A high -ranking officer of the White House announced CNBC and other news agencies on Wednesday morning that Trump would probably soon be released to the Fed chairman after the Republicans of House allegedly encouraged the President to take this step during a private meeting on Tuesday evening.
Trump later denied these reports, although at some point he left the door open to fire Powell.
“We don't plan to do it,” said Trump reporters in the Oval Office. “I don't rule out anything, but I think it's highly unlikely unless he has to go to fraud.”
According to the reports that Powell would be released, the dollar quickly recovered after Trump published his rejection.
Powell said on July 1 that he would probably have reduced interest rates, but he had held back due to the economic uncertainty and inflation risks through Trump's tariff policy.
Powell was appointed in 2017 during his first term of the President of Trump – an apparently uncomfortable fact for the president, who also said on Wednesday: “I was surprised that he was appointed, I was honestly that I was surprised [President Joe] Biden put it in and expanded him. “
Powell repeatedly said that Trump is not legally allowed to dismiss him. His current term will be discontinued in May 2026.
The White House did not react immediately to the request from CNBC to comments on Warren's comments.
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