1. Trump administration may consider firing Fed Chair Powell, according to Hassett. 2. Criticism of Powell escalates, focusing on Fed's costly renovation project. 3. Hassett suggests administration’s next move hinges on Fed’s response to questions. 4. Potential leadership changes at the Fed could impact monetary policy direction. 5. Trump has potential candidates in mind for Powell's replacement next year.
Political instability surrounding the Fed can create uncertainty in the markets. Historical examples show that leadership changes at the Fed can lead to volatility in stock indices, including the S&P 500.
The Fed’s management and potential leadership changes can profoundly influence interest rates and economic outlook, directly affecting the stock market including the S&P 500.
Expect market reaction in the near term due to ongoing political developments regarding the Fed’s leadership. Past instances, such as when Bernanke faced criticism, led to immediate market fluctuations.