Markets signal alarm as Trump threatens Fed autonomy – deVere CEO

The moment President Donald Trump yesterday floated, again, the idea of firing Federal Reserve Chair Jerome Powell, markets flinched.

Currency traders dumped the dollar. Treasury yields jerked in both directions. Stocks wobbled. Within minutes, it became clear: global investors were no longer dismissing the idea that the Fed’s independence is under threat—they were reacting to it.

“This isn’t a rumor traders shrugged off. This was treated as a live scenario,” says Nigel Green, CEO of global financial advisory giant deVere Group.

“Markets moved because they now see political control of the Fed as a genuine possibility.”

After the reports emerged that Trump had asked lawmakers whether he should dismiss Powell, the dollar slumped 1.2% against a basket of peers. Treasuries and equities followed suit. Though Trump later said he was “not planning” to remove Powell imminently, the damage was already done.

“Markets heard what they needed to hear. The president asked the question. That alone was enough to rattle confidence in the Fed’s independence,” says the deVere CEO.

He warns that the implications go far beyond this one incident.

“What changed is belief,” he explains. “The idea that a sitting president could remove a central bank head for policy reasons was once considered unthinkable. Now, it’s being taken seriously. That shift has consequences.”

Central bank autonomy has long been a bedrock of investor trust in US institutions. It guarantees that interest rates are guided by economic conditions, not political timelines. That principle is now being openly tested.

“Remove Powell—or even keep him in a weakened position—and the signal is that future decisions at the Fed may follow political preference rather than policy discipline,” says Nigel Green.

“That’s what markets are reacting to. This is what they’re starting to price in.”

The spike in volatility across bonds, currencies and stocks underscores how fast sentiment can change when institutional guardrails are seen to weaken.

“It doesn’t take a formal announcement. Even raising the possibility triggers a reaction,” he continues. “Because once the independence of the central bank is questioned, the baseline for everything else begins to shift.”

Nigel Green warns that this is not a short-term concern.

“Markets may stabilise in the coming days, but the underlying issue hasn’t gone away. Once trust in central bank autonomy is shaken, it takes far more than a press quote to rebuild it,” he says.

Even if Trump backs away from immediate action, the broader concern lingers: Powell may stay, but at what cost to his authority?

“A Fed Chair who is publicly targeted by the White House is put in a compromised position,” notes the deVere chief executive.

“It injects doubt into every decision the Fed makes going forward. Is this move based on data, or on pressure? That ambiguity is dangerous.”

The implications are global. International investors rely on the Fed not just as a rate-setter, but as a signal of institutional strength. That credibility supports the dollar’s dominance, drives capital inflows, and underpins global benchmarks.

“If the Fed is seen as an extension of the Executive Branch, that credibility erodes,” says Nigel Green. “If the credibility goes, capital follows.”

The deVere CEO says this episode has injected a new and serious risk into the global financial system.

“This is no longer just about one central banker,” he says. “It’s about whether the most important monetary institution in the world can still act independently. If it can’t, or if that’s in doubt, markets will react accordingly, and repeatedly.”

He concludes: “The trust that took decades to build can be weakened in a day. It’s not about the politics. It’s about whether investors believe the Fed still makes decisions without fear or favour. If that belief breaks down, the consequences will be swift and far-reaching.”