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Top economist Mohamed El-Erian says Powell should resign to preserve Fed independence

1. Mohamed El-Erian calls for Powell's resignation to protect Fed's independence. 2. His view contrasts with Wall Street consensus favoring Powell's term completion. 3. El-Erian warns of growing threats to Fed's independence under Powell's leadership. 4. Further economic uncertainty is anticipated if Powell remains in office. 5. Trump's administration increases pressure on Powell regarding interest rate decisions.

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FAQ

Why Bearish?

Calls for a leadership change at the Fed can create uncertainty, historically leading to market volatility. For instance, leadership changes or controversies in the Fed often correlate with S&P declines, such as during Bernanke's tenure.

How important is it?

The article discusses the Fed's leadership and independence, critical factors influencing market stability and investor sentiment, impacting the S&P 500 directly.

Why Short Term?

The potential resignation of Powell could lead to immediate market reactions, as observed in past Fed leadership disputes impacting market sentiment quickly.

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