Warren's Dire Warning: Stock Market Crash Looms if Trump Fires Powell

GCW
Jun 1, 2025
2 min read

Warren Warns of Market Meltdown if Trump Ousts Powell

Senator Elizabeth Warren has issued a stark warning: if President Donald Trump were to fire Federal Reserve Chair Jerome Powell, it could trigger a significant crash in the US stock market. This comes after Trump's recent social media post expressing his desire for Powell's "termination" due to a perceived lack of action on interest rate cuts.

Key Takeaways

Senator Elizabeth Warren believes firing Fed Chair Jerome Powell would lead to a stock market crash.
President Trump publicly called for Powell's termination over interest rate policies.
Warren emphasizes the importance of the Fed's independence from political influence.
The legality of a presidential firing of the Fed Chair is a contentious issue.

The Independence of the Federal Reserve

Warren's primary concern centers on the sanctity of the Federal Reserve's independence. She argues that the strength of the US stock market and, by extension, the global economy, relies on the perception that key financial institutions operate free from political interference. According to Warren, allowing a president to dictate interest rates would erode this crucial distinction, making the US indistinguishable from "any other two-bit dictatorship around the world."

A History of Disagreement

This latest flare-up is not the first time President Trump and Chair Powell have publicly clashed. Their disagreements date back to Trump's first term, with the former president frequently criticizing Powell for not cutting interest rates to lower levels. In October 2019, Trump famously tweeted, "Jay Powell and the Federal Reserve Fail Again. No 'guts,' no sense, no vision!" after the Fed made a modest rate cut.

Legal Ramifications and Future Outlook

The question of whether a president can legally fire the Fed Chair before their term ends remains a point of contention. Powell himself has maintained that such an action is "not permitted under the law." The Supreme Court is also expected to rule later this year on the legality of recent firings of board members from other independent agencies by Trump, which could set a precedent. Despite the public rhetoric, Trump told NBC in December that he did not have plans to fire Powell, though he added, "if I told him to, he would."

Markets are currently anticipating interest rate cuts from the Fed, with expectations for a 25 basis point cut at the June FOMC meeting and a total of 100 basis points by the end of the year, according to the CME's FedWatch Tool. Powell has indicated that the Fed will keep rates on hold until it better understands the impact of Trump's tariffs on inflation and the broader economy.