this post was submitted on 15 Jul 2025
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Economics

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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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[–] TropicalDingdong@lemmy.world 52 points 4 days ago (1 children)

I mean shit, the entire global economy almost collapsed because a boat got turned sideways.

Whatever this would represent, catastrophic isn't enough of a word for it.

[–] TheReturnOfPEB@reddthat.com 16 points 4 days ago* (last edited 4 days ago) (1 children)
[–] TropicalDingdong@lemmy.world 3 points 4 days ago

“I’ve been so worried about losing my old life that I forgot about all the exciting new chapters that lay ahead. I could’ve never seen Ever coming, but now that he’s here, I’m thrilled by what else lies on the road ahead.”

Well then it was all worth it, wasn't it?

[–] sh00g@lemmy.zip 49 points 4 days ago (2 children)

"The market can remain irrational longer than you can remain solvent."

Given how the markets have at this point have elected to completely ignore Trump it wouldn't surprise me if the sky falls for two days and then the world collectively decides to ignore and forget the shit show.

[–] 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.

[–] Zron@lemmy.world 3 points 3 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.

My thoughts exactly. The billionaires control enough of the markets that they will force a correction and everyone will buy back in... and the billionaires will get even richer.

<heyiveseenthisone.png>

[–] expatriado@lemmy.world 39 points 4 days ago

he will say Powell is fired, buy lots of bonds and stocks, and then say just kidding, and sell again

[–] Tollana1234567@lemmy.today 19 points 4 days ago (1 children)

and you, Duestche bank, helped him and the russians do it via laundering money for him.

[–] geissi@feddit.org 2 points 4 days ago (1 children)

Duestche bank

Deutsche Bank

[–] Nico_198X@europe.pub 9 points 3 days ago

Douche Bank

[–] Treczoks@lemmy.world 16 points 4 days ago

Well, the USD as far overrated, so any correction is a) needed and b) painful.

The only hope is that a breakdown of US economy will be remembered as made by Trump and the GOP.

[–] awaysaway@sh.itjust.works 11 points 4 days ago (6 children)

what is the upside for MAGA of devaluing USD?

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

American manufactured products are cheaper on the world market.

Raw resources are more expensive to import so source everything form the US

[–] teamevil@lemmy.world 4 points 3 days ago

Cheaper for the 1% to buy all of our stuff to fully become a corrupt nation of oligarchy.

[–] explodicle@sh.itjust.works 12 points 3 days ago

They want to destroy America because corporate centrists already destroyed their rural communities.

[–] Ushmel@lemmy.world 3 points 3 days ago

Easier to pay down debts made up of worthless money (if you have money that isn't worthless). If you had €100 in November 2024, you could pay off $100 debt. Right now you only need €85 to pay off $100 debt.

[–] wise_pancake@lemmy.ca 11 points 4 days ago

Stock market numbers go higher

[–] match@pawb.social 4 points 3 days ago

making more money is good, but lowering the worth of your workers is another way to afford more people

[–] Revan343@lemmy.ca 5 points 3 days ago (4 children)

So...what do I buy puts on, to profit from this?

[–] Ushmel@lemmy.world 2 points 3 days ago* (last edited 3 days ago)

"you want to short the federal government??? yeah we will take your money high five bro"

I think I've seen this movie.

You can buy inverse ETFs on bond market benchmarks. Unlike stocks though, the interest rate will tick up as bond demand (price) goes down, so the dips tend get muted as people gobble up anything over 5%

[–] funkforager@sh.itjust.works 3 points 3 days ago (1 children)
[–] DragonTypeWyvern@midwest.social 3 points 3 days ago* (last edited 3 days ago) (1 children)

If you assume the entire stock market won't collapse. Half those companies aren't just inbred, they're codependent.

Finally, some good news.

[–] ikidd@lemmy.world 2 points 3 days ago
[–] burgerpocalyse@lemmy.world 1 points 3 days ago

1000 units of gold-pressed latinum

[–] shalafi@lemmy.world 15 points 4 days ago

Been waiting on Trump's temper to get the best of him. You know the people around him are manipulating him in every way possible to avoid firing Powell. This is a thing he can't lie, cheat or walk back. Most of all, it would instantly devastate the rich. And then the rest of us of course.

Great article that hits hard on a subject I've been thinking on.

[–] TankovayaDiviziya@lemmy.world 5 points 3 days ago (2 children)

I'd allow it so that people will finally realise.

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

People will cheer the low interest rate on their plummeting dollar value debt.

[–] Wispy2891@lemmy.world 1 points 3 days ago

Realize what? They'll say "fucking Biden, look at the state he left the country"

[–] neon_nova@lemmy.dbzer0.com 6 points 4 days ago

I live and work in a third world country. The currency here is weak against the dollar.

I do something think if the dollar crashed to the value it is in this country, I could pretty quickly pay off my families debts.

[–] roserose56@lemmy.ca 5 points 4 days ago

We already knew this, it's just matter of time.

[–] altphoto@lemmy.today 2 points 4 days ago

Well what's another lifetime if I get to pay enough of the house that my grandchildren can probably rent it for a lower monthly installment?

[–] SkunkWorkz@lemmy.world 1 points 4 days ago

How can it collapse the currency market? If one currency goes down in value the other goes up. Currency traders earn money either way they thrive on volatility.

He probably means the USD is going to drop and that will have severe consequences for the world economy. Since the US is a net importer. And most debt in the world is held in USD.