Global investors endured this year's most turbulent night as rumors of Jerome Powell's dismissal triggered financial tremors. At 22:00 Beijing time, CBS News reported President Trump queried House Republicans about removing the Federal Reserve Chair, with attendees allegedly supporting the move. The New York Times later claimed Trump had drafted a termination letter.
Markets convulsed violently: - Gold surged while the dollar plunged to session lows - U.S. stocks tumbled with 10-year Treasury yields spiking to 4.49% - Panic spread through trading floors worldwide
Within sixty minutes, Trump issued a stunning denial: "No plans to take action" against Powell, contradicting reports of the drafted letter. Markets reversed course abruptly: - Gold surrendered gains as the dollar rebounded - Equities recovered while Treasury yields retreated to 4.45%
This whiplash reveals three critical dynamics. First, the extreme market reaction forced Trump's rapid retreat - consequences of inaction would have been catastrophic. Second, past dismissal threats were dismissed as bluster, but markets now perceive genuine institutional risk. Terminating Powell would shatter Fed independence, potentially unleashing inflationary chaos.
Third, this episode signals a dangerous new phase. Trump wasn't seriously considering dismissal but testing market manipulation tactics. His administration understands the legal barriers to firing Powell, yet deliberately stoked uncertainty to pressure the Fed. The gambit? Manufacture expectations for rate cuts through psychological warfare - mirroring his tariff news playbook.
Last night served as Trump's opening salvo in direct market intervention. Traders attempting to navigate these orchestrated crises risk financial whiplash. This high-stakes experiment in presidential market manipulation has irrevocably altered the rules of engagement between Washington and Wall Street.
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