Trump Sparks Market Chaos: Denies CBS Reports Of Imminent Firing Of ‘Knucklehead’ Powell

Update (1200ET): Well that didn’t take long. President Trump was asked in the Oval Office whether he was looking to fire Powell ‘soon’.

He responded ‘no’…

• *TRUMP: POWELL ‘TERRIBLE’ FED CHAIR

• *TRUMP, ASKED IF HE WILL FIRE POWELL: HE HAS BEEN TOO LATE

• *TRUMP: POWELL TRIED TO CUT RATES FOR DEMOCRATS

• *TRUMP: POWELL DOES A TERRIBLE JOB, WE FIGHT THROUGH IT

• *TRUMP, ASKED IF HE WILL FIRE POWELL:  ‘NOT PLANNING’

• *TRUMP: NOT TALKING ABOUT FIRING POWELL

• *TRUMP ON FIRING POWELL: HIGHLY UNLIKELY

• *TRUMP DENIES DRAFTING LETTER TO FIRE POWELL

• *TRUMP: POWELL A ‘KNUCKLEHEAD’

Then Trump switched to the possible ’cause’ for any firing: 

• *TRUMP ON POWELL, FRAUD PROBE: I THINK HE’S GOT SOME PROBLEMS

• *TRUMP: POWELL SPENT MORE MONEY THAN EXPECTED

• *TRUMP SAYS HE THINKS POWELL IS ‘ALREADY’ UNDER INVESTIGATION

And all those moves in markets below reversed!!!

*  *  *

Initially CBS reported that President trump spoke to a group of GOP lawmakers about firing Fed Chair Powell (and markets reacted modestly), but now Bloomberg reports that a White House official confirms Powell’s outser is imminent.

While the lawmakers voiced support for the move, which would likely roil financial markets and lead to a consequential legal showdown, Trump has not made a final decision and could change his mind, according to the official who requested anonymity to discuss a private conversation.

The NYTimes reports, according to two people briefed on the meeting, President Trump showed off a draft of a letter firing the Powell during a meeting with roughly a dozen House Republicans on Tuesday night, polling them as to whether he should do it and indicating that he likely would.

Some advisers to and allies of Mr. Trump insist he’s simply trolling Mr. Powell and hoping to torment the Fed chair but won’t actually follow through with trying to fire him.

In seeking to fire him, Trump would test the legal bounds of his authority over the central bank and independent federal agencies more broadly.

In recent days, Trump has lambasted Powell over renovations at the central bank that the president and his allies have seized on, arguing that the work has been plagued by cost overruns and is exorbitantly lavish for a government office building.

Trump suggested that the renovation costs were “pretty disgraceful.”

Asked if it was a fireable offense by reporters on Tuesday, Trump responded “I think it sort of is,” but stopped short of saying he planned to push out the Fed chief over the flap.

“I think he’s a total stiff, but the one thing I didn’t see him as is the guy that needed a palace to live in,” Trump said.

Anna Paulina Luna, a Florida Republican who was among the holdouts on the cryptocurrency bill, wrote on social media that she was “Hearing Jerome Powell is getting fired! From a very serious source.”

In a later post, she wrote, “I’m 99% sure firing is imminent.”

The reaction was swift with stocks tumbling…

The bond market is swinging wildly with the short-end bid and long-end yields oaring (major steepening)

Rate-cut expectations are spiking…

Gold soaring…

And bitcoin bid…

The dollar was clubbed like a baby seal…

“If Trump fires Powell and puts someone in place to bully the Fed into cutting rates, the bond market would react poorly to that — it would sell off and yields would go up,” said Jim Bianco, president and macro strategist at Bianco Research.

“We’ve already seen an example” of what might happen, he said, pointing to the jump in 10-year Treasury yields in late 2024 that came alongside Fed rate cuts.

The market was “basically saying to the Fed you have the wrong policy — the economy doesn’t need extra stimulus. That’s what would happen now.”

Trump’s timing could not be better (or worse) for stocks as Goldman predicted the top would be July 17th.

Market chaos is certainly a decent distraction from the Epstein ‘hoax’?