GlobalData TS Lombard: Perkins Vs Beamish If Trump Fires Powell...
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Jul 17, 2025 Dario Perkins and Freya Beamish, economists at TS Lombard, dive into compelling discussions about the potential market chaos if Trump dismisses Powell. They analyze the resurgence of tariff-induced inflation and its effects on consumer prices, particularly for low-income individuals. The conversation also highlights global economic stimulus strategies, contrasting the slow UK response with more robust measures in Europe. With central banks under political pressure, they explore the resilience of markets and implications for foreign investment.
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Firing Powell Upsets Markets
- Firing Powell would increase inflation expectations and lead to market instability.
- Global investors doubt the US administration, fearing politicization of Federal Reserve.
Central Bank Independence Threatened
- Central bank independence has been sacrosanct but now faces challenge from politicized rhetoric.
- Independent Fed chair is critical to controlling inflation expectations amid election pressures.
Tariff Inflation Emerges Slowly
- Tariff inflation is beginning to appear in certain US goods categories like toys and apparel.
- Fed may struggle to cut rates if tariff inflation pushes consumer prices above 3% by year-end.