If Trump gets his way and removes Jerome Powell as chairman of the U.S. Federal Reserve, the market reaction would be swift and brutal, Deutsche Bank’s George Saravelos argues.
It could collapse the currency and bond markets, he says in a note seen by Fortune. Polymarket puts the chances of a Powell ouster at 19%.
“We consider the removal of Chair Powell as one of the largest underpriced event risks,” Saravelos says.
USD is already down 15% to the Euro as of the start of the year.
I think that’s what people seem to miss, here. Not the risk of a stock market crash but of a massive inflationary surge as domestic dollars rapidly outstrip natural resources. We’re staring down the barrel of Stagflation.
If Trump takes over the FED, that 15% will look like a dream.
Trump selected Powell back in 2018.
I know. But now he needs lower interest rates or it will make him look bad because it will expose his economic failures, something he hates.