Bloomberg Talks Claudia Sahm, New Century Advisors Chief Economist, Talks Jerome Powell, the Fed, Inflation
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Apr 21, 2025 AI Snips
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Risk of Removing Fed Chair Powell
- The risk of President Trump removing Jerome Powell as Fed Chair should be taken seriously.
- However, it's likely the administration will decide against this drastic move due to potential negative consequences.
Importance of Fed Independence
- The Fed must be independent to keep inflation low but remains accountable to Congress and the public.
- Political pressure can impede Fed's decision-making during fragile economic periods.
Consequences of Undermining Fed Chair
- Undermining the Fed Chair could damage the Fed's credibility and disrupt the economy.
- Inflation expectations would worsen, and interest rates would not fall if Powell is removed.