Francesco Bianchi, an economics professor at Johns Hopkins University, said it was unlikely that Trump would act on his threat to fire Federal Reserve Chairperson Jerome Powell, but the pressure from his public actions to push for a rate cut would still have an impact on the Fed's decision-making. After Trump's threat last week, the Fed now knows that it will be blamed by the public in the event of a recession. After Powell made it clear that he was in no hurry to cut interest rates, and Trump responded by saying he might fire Powell, the stock market fell sharply, as the Fed's independence was at risk of being weakened. Francesco Bianchi believes Trump will not act on his threat. The main reason is that Powell's term will end in about a year. Doing so would cause far more confusion than good. Removing Powell would cause financial marekts to expect further increases in interest rates in the future. (Golden Ten)
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