Elizabeth Warren warns of stock market crash if Fed Chair resigns

Senator Elizabeth Warren has warned of a serious threat to the US stock market if Jerome Powell leaves his post as head of the Federal Reserve (Fed). Speaking at the New York Stock Exchange (NYSE), she emphasized that President Trump's attempt to dismiss Powell would set a precedent for a political violation of the central bank's independence.

According to Business Insider, the long-standing tension between the President and the Fed Chairman as well as Trump's comments on Powell's imminent resignation are particularly alarming. However, as the agency notes, Powell keeps a tough stance. He claims that there are no legal grounds for his dismissal, citing the current legislation.

Warren believes that the Fed's politicization may reduce investor confidence, with risks of large-scale capital outflows and a collapse of the market. 

Meanwhile, the Fed seeks ways to avoid the impact of Trump's trade policies on monetary decisions. The regulator continues to follow its own projections and plans the next rate cut only in June 2025, regardless of the President's demand for lower rates, according to Business Insider.