One Bank Goes There: ‘What If Powell Leaves?’

11 thoughts on “One Bank Goes There: ‘What If Powell Leaves?’”

1. Here’s a decent article about what P2025 is after and how Vought is central to establishing an autocratic theocracy. These people interpret the Constitution in similar ways that the Bible tells them gays must be re-educated from sin and marginalized by law, women should not have rights because of the apple. And the Presidency should overrule the courts and Congress. And the Universe is 6000 years old, science is the enemy of Faith, secularism should be torn out by trunk and root, and so on. https://www.wbur.org/onpoint/2025/02/12/russell-vought-radical-constitutionalism-trump-constitutional-crisis

   1. Heading US back so Christian white, and might, makes right again

2. A former student of mine ran all of ING’s US fixed income money for many years. It may not be a huge player but it plays for my teamthey are my player and is not insignificant. My very smart alum now runs all the government money in one of the western states. (He moved for the outdoor sports.)

3. I think the market (especially in hard currency) is already starting to reflect your viewpoint that this outcome is not only possible, but likely. See it more as resignation than firing though as can’t imagine Trump firing all the hawks on the Fed Board works, especially if inflation flares up.

4. Since FOMC is a committee and Senate must approve nominees, Trump would want to replace Powell and a few/several governors during 2026 i.e. before any risk of losing Senate control. Extra-judicial firing of Fed Chair and multiple governors in a short period would be another Saturday Night Massacre but 10X, very dramatic, and I think market reaction would be very severe.

5. How much of this is Trump trying to dominate Powell vs. Trump trying to control the Central Bank? It seems more of a personal vendetta than a policy thing.

6. This is the sycophant and scapegoat administration. You are one or the other. Just for the theater I hope Jay stays and does nothing if the data continues to show up mixed. Just someone to tell Princess Emolument (Molly) “no” would be worth it (especially if the “it” is 25 basis points and not being stubborn in the face of a full blown recession).

7. Powell may just be the last adult in Washington D.C. in a position of any consequence. Hopefully the Congress will prove unable, or perhaps unwilling, to do much with the Marriner Eccles story. That or Trump TACOs again as the bond vigilantes re-emerge to drive-up long-term rates.

8. H-Man, the Fed fiasco may have legs since a Fed reserve seat comes up every two years only during even years and the appointment is for 14 years. Next opening is January. So if Powell is ousted, and then POTUS makes the January appointment, he still needs to find two more votes for a majority on the Federal Reserve but then the FOMC has 12 members of which the Federal Reserve is 7. So now he has to find another 3 votes in order to have a majority of 7 votes. Those people are appointed for 1 year terms. Which suggests it is doable but probably needs to be done by January when that Federal Reserve seat comes open. Scary times indeed.

9. There is an event iin the past that perfectly describes what would happen if Powell was replaced. Back in 1976 Jimmy Carter became President and he strongly disliked Arthur Burns. He bad-mouthed him all the time and within a year Carter forced Burns out and replaced him with a ‘yes-man’, G.William Miller. Miller never hiked Fed Funds – ever – rates went up, inflation went up, the economy went nowhere, and gold went to $800. You can look it up.

10. Powell is best advised to don his worst fitting suit and mix it up with the barking bully on his own terms. Time to give MAGA a taste of STFU with a surprise 25 bp hike later this month. The independence of the Fed and the proper functioning of the markets is more important than Powell’s job (or legacy), or his ostensible boss’ drive to put a toll booth in front of everything.