Analysis: Trump is unlikely to fire Powell, but may still "manipulate" the Federal Reserve

ChainCatcher news, according to Jinshi reports, Francesco Bianchi, an economics professor at Johns Hopkins University, stated that Trump is unlikely to act on his threat to fire Federal Reserve Chairman Powell, but the pressure from his public actions to push for interest rate cuts will still influence the Fed's decisions. After Trump issued his threat last week, the Fed now knows that if a recession occurs, it will be blamed by the public.

After Powell made it clear that he is in no rush to cut rates, and Trump responded by saying he might fire Powell, the stock market fell sharply, as the independence of the Fed faces the risk of being undermined. Francesco Bianchi believes that Trump will not act on the threat. The main reason is that Powell's term will likely end in about a year. The chaos caused by such an action would far outweigh the benefits. Replacing Powell would lead to financial markets expecting future interest rates to rise further.