A sudden exit by Fed Chair Jerome Powell would create both a political and monetary shock.
While the Chair is technically protected from arbitrary removal. Recent reports confirm that President Trump and his allies are scrutinising the Fed’s $2.5 billion renovation project—potentially laying the groundwork for a “for cause” dismissal.
A surprise departure would undermine confidence in the Fed’s independence. The U.S. dollar could fall sharply across major pairs.
USD/JPY could fall toward ¥145, with safe-haven demand favouring the yen. However, the reaction may be less severe than in pairs like Swiss franc which we have noted in the past is the potentially preferred safe haven. A panic selloff could extend to 142.20—a prior consolidation floor.
GBP/USD could surge as traders anticipate a more dovish Fed stance under the new Trump-stooge Fed Chair. From a technical perspective, GBP/USD is maybe already oversold and potentially poised for a potential rebound anyway—Powell’s resignation or firing could potentially exacerbate this. The first level to watch being a return to 1.3700, assuming the likely expectation of Fed rate cuts rise.
For the exact date and time of these major economic events, import the BlackBull Markets Economic Calendar to receive alerts directly in your email inbox.
