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If Trump fires the Fed’s Powell ‘both the currency and the bond market can collapse,’ according to Deutsche Bank (fortune.com)

submitted 4 days ago by babysandpiper@sopuli.xyz to c/economics@lemmy.world

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If Trump gets his way and removes Jerome Powell as chairman of the U.S. Federal Reserve, the market reaction would be swift and brutal, Deutsche Bank’s George Saravelos argues.

It could collapse the currency and bond markets, he says in a note seen by Fortune. Polymarket puts the chances of a Powell ouster at 19%.

“We consider the removal of Chair Powell as one of the largest underpriced event risks,” Saravelos says.

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[–] chaogomu@lemmy.world 21 points 4 days ago (2 children)

Part of that is high frequency trading. Computers that blindly trade with other computers. It has a stabilizing effect on the market because it's divorced from reality.

But there's the risk. It's divorced from reality.

So far, when things go bad the Fed has stepped in to halt trading for the day.

[–] Jakeroxs@sh.itjust.works 9 points 3 days ago

The "fed" doesn't halt trading, https://www.investor.gov/introduction-investing/investing-basics/glossary/stock-market-circuit-breakers

[–] Zron@lemmy.world 3 points 2 days ago

I hate that we evaluate the health of the economy by the growth in the stock market.

The stock market would continue growing until the power grid failed if every human on earth just evaporated into mist.

Actually it would probably break before that when one of 6 people’s two factor authentication timed out and the computer no longer had access to their accounts.