D-Mass. Sen. Elizabeth Warren warned Thursday that the US market would “crash” if President Donald Trump has the authority to fire Federal Reserve Chairman Jerome Powell.
Comments from Warren, Powell’s frequent critic on CNBC’s “Squawk on the Streets,” came hours after Trump wrote in a social media post that the Fed’s chair “can’t finish quickly enough.”
A senior White House official later told CNBC Trump’s broadside should not be seen as a threat to Powell’s firefighting and he had no plans to end his term early.
Powell previously said the president had no power to fire him.
“I regularly entangle (Powell) both on regulations and interest rates,” Warren admitted in a statement on the New York Stock Exchange.
“But get this in mind. If Chairman Powell is fired by the US President, the US market will crash,” she said.
Warren, a ranking member of the Senate Banking Committee, said that the “infrastructure” that favors the stock market, and therefore the global economy is “the idea that big pieces are independent of politics.”
If the main economic lever is “the subject of a president who just wants to swing his magic wand,” the US is indistinguishable from other two-bit dictatorships around the world,” she said.
Trump repeatedly chose Powell by name, urging the US Central Bank to lower interest rates in the hopes of fostering rapid economic growth.
The Fed hiked the rates during President Joe Biden’s term in office to curb the rampant inflation caused by the coronavirus pandemic and launch the dial in 2024.
However, the Fed said it was in no hurry to continue cutting them, referring to the uncertainty created by Trump’s changing tariff policies. Powell repeated his stance Wednesday in a speech at the Chicago Economic Club, saying the president’s import taxes “are likely to further alienate us from our goals.”
On Thursday morning in his true social post, Trump accused Powell of “always too late and wrong” while defending his broad tariff plans.
“We should have lowered the fees a long time ago, but he certainly should have lowered them now,” Trump wrote. “Powell’s ending can’t come quickly enough!”
– Megan Cassella and Fred Imbert of CNBC contributed to this report.
