Overview

• President Trump told reporters he is “not planning” to remove Jerome Powell and called a firing “highly unlikely” unless fraud is uncovered in the Fed’s renovation project
• U.S. equities, bond yields and the dollar briefly swung on reports of an imminent ouster before reversing course after Trump’s public denial
• Senate Republicans including John Kennedy and Thom Tillis cautioned that attempting to dismiss Powell would send shockwaves through financial markets and erode confidence in monetary policy
• Wolfe Research and other analysts warn that Powell would likely sue to block any removal, setting up a protracted legal battle over for-cause protections that could reach the Supreme Court
• White House advisers and some GOP lawmakers have spotlighted $700 million in cost overruns on the Fed’s $2.5 billion headquarters overhaul as a possible “for-cause” rationale for dismissal