Trump vs The Fed! Will He Nuke the Economy to Get His Way?!

The Temple of Doom...ed Economy?

Snakes! Why did it have to be snakes...and economics? Seems our fearless leader President Trump has decided to go all 'Raiders of the Lost Ark' on the Federal Reserve specifically Fed Chair Jerome Powell. Word on the street – or rather the CNBC news feed – is that Trump's none too pleased with Powell's decisions and might just try to 'relieve' him of his duties. Firing Powell they say? That's a bold move even for a guy who once wrestled a tiger...or was that just a really convincing dream I had after one too many whiskeys?

He Chose...Poorly (For the Economy)

Economists are running around like villagers fleeing Hovitos tribesmen. According to some fancy pants number crunchers even if Trump *does* manage to boot Powell it won't necessarily get him the rate cuts he's so desperate for. Apparently it's not as simple as just swapping out the head honcho. Paul Ashworth from Capital Economics suggests that Trump would have to fire the entire Fed Board! Imagine the headlines! It is more likely to cause more problems than solutions.

The Last Crusade...Against the Fed?

Now I'm no economist but even *I* know that messing with the Fed's independence is like poking a sleeping cobra with a stick. Ashworth thinks such a move would trigger a major market meltdown. The dollar would plummet and rates would skyrocket. Sounds like a disaster worthy of a biblical plague! Personally I'd rather face down Belloq any day.

Deference Schmiference!

Apparently Powell's power isn't as absolute as it seems. Michael Feroli from JPMorgan claims that the Fed Chair's influence is largely based on 'historical deference.' So even if Trump does find a puppet to replace Powell the other Fed members could still band together and vote against him. It's like the junior professors finally standing up to the tyrannical Dean! About time I say. About time!

It Belongs in a Museum!...Or Does It?

Peter Sidorov from Deutsche Bank echoes this sentiment suggesting that Fed members might actually *push back* against Trump's meddling if they think he's gone too far. Imagine the audacity! An economist standing up to a politician! It's like watching a librarian challenge a gladiator! But I digress. Point is Trump's not going to have an easy time bending the Fed to his will. Why does it always have to be politics!

Fortune and Glory...Or Financial Ruin?

All this drama is already spooking investors. Stocks bonds and the dollar are all taking a nosedive. And Wall Street worries that further tampering with the Fed could lead to even bigger sell offs and fears of inflation. Feroli warns that any weakening of the Fed's independence would only worsen an already volatile situation. Will Trump heed the warnings or will he continue down this dangerous path? As I always say 'we are only buying time' and in this case the consequences of the current course of action can be catastrophic to the world as a whole.