It was a single sentence that was enough to shake Wall Street: Donald Trump had “talked about firing the Fed chair.” He said nothing more at first - and yet it was enough to send the stock market on a wild ride. First a drop, then a rapid recovery. When he later said he thought it was “highly unlikely” he would fire Jerome Powell - “unless he has to leave for fraud” - the markets calmed down. For now. Because the actual signal had already been sent.
Trump is playing with one of the last remaining principles of American economic policy - the independence of the central bank. By publicly musing about removing the chair of the Federal Reserve for political reasons, he is not only undermining trust - he is shaking the entire institutional framework. A president who wants to lower interest rates to pump up the market because his own tax giveaways are driving up the deficit - this is no accident, it is a strategy. And it is eerily reminiscent of his past: big bets, short-term gains, long-term damage. Powell himself, factual and reserved, wants to wait and see how the announced tariffs actually affect inflation and the economy. Trump, on the other hand, wants immediate results. What protects the central bank, the president sees as an obstacle. What means stability, he calls weakness. And so an institution whose task is to balance growth and inflation suddenly stands at the center of a political power play - with consequences for mortgage rates, business investments, and the global credibility of the United States. But it is not just the Fed that is under pressure. Trump’s trade policy is beginning to show tangible effects. The chip equipment manufacturer ASML, a key European player in the tech sector, warned of growing uncertainty - also due to US tariffs. The stock plummeted. At the same time, shares of large US companies like Johnson & Johnson surged, as they presented record numbers despite adverse conditions. The market is swaying - between optimism and fear, between profits and a policy that can overturn everything at any moment.
rump’s tone is clear - whoever contradicts him gets fired. Whoever names reality is suspected. And whoever takes an independent stance risks their position. That Powell has so far refused to bend makes him a target. That the president is nevertheless keeping him in office - for now - is not a sign of moderation, but of calculation. Uncertainty is being generated. Markets are supposed to shudder. And when they react, Trump wants to interpret that as confirmation of his demands. But uncertainty comes at a price. Long-term bond yields are falling because investors fear the Fed could lose its role. A central bank that yields to political whims can lower rates in the short term - but in the long run can no longer fight inflation. Trust in its independence is the true currency being squandered here. And while Trump announces minor successes on the diplomatic stage - for example, with Indonesian tariffs - the overall economic course remains erratic. Today a tweet, tomorrow a decree. Yesterday a threat, today reassurance. It is a game in which the rules constantly change - and in which more and more players are leaving the table. “All In,” they say in Las Vegas when someone bets everything on one card. Trump once did that with real estate. Then with his brand. Now with trust in American institutions. And as so often in his career - the short-term thrill is guaranteed. The long-term bill is left to others.
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