Capital Economics: Trump's firing of Powell will impact the market, and the new chair will not be able to lower interest rates as desired.

According to Mars Finance, Stephen Brown, the North America Deputy Chief Economist at Capital Economics, pointed out in a report that the market response on Wednesday indicated how investors might react if Trump follows through on his threat to dismiss Fed Chair Powell. Brown stated that at that time, the dollar, stocks, and short-term bond yields could fall, while long-term yields might surge. Trump has dismissed reports of his attempt to fire Powell, calling it "highly unlikely." However, the new Fed chair nominee is likely to be announced well before Powell's term ends in May 2026. Brown emphasized that even if the chair is replaced, it is extremely unlikely that the Fed would cut rates by 300 basis points as Trump has called for. (Jin10)