27-3-2025 – Senator Elizabeth Warren has issued stark warnings about President Trump’s alleged plans to dismiss Federal Reserve Chairman Jerome Powell, characterising it as part of a broader assault on governmental independence.
The Massachusetts senator, speaking to Bloomberg Television from the nation’s capital, drew parallels between Trump’s expanding interpretation of executive authority and monarchical power. Her comments came mere hours after Powell’s high-level discussions with Treasury and Federal Reserve officials regarding inflation trends.
Warren’s critique extended beyond immediate concerns, touching upon Trump’s alleged intention to install Paul Atkins at the Securities and Exchange Commission’s helm. She pointedly questioned Atkins’ judgement, noting his pre-2008 financial crisis voting record on regulatory matters with a particularly caustic observation about his “20-zero hindsight”.
The political landscape has been further complicated by Atlanta Federal Reserve President Raphael Bostic’s revised economic projections. In a notable shift, Bostic has reduced his forecast to a single rate cut for 2025, citing Trump’s tariff policies as a primary factor. His analysis suggests inflation might not align with the Fed’s 2% target until early 2027, a timeline extending beyond previous projections.
Amidst these developments, market strategists have urged caution. Ken Mahoney of Mahoney Asset Management offered a particularly sobering perspective, suggesting that the widespread desire for multiple rate cuts might be misguided. Meanwhile, Baird’s investment strategist Ross Mayfield emphasised the unreliability of Federal Reserve projections over recent years.
The situation has been further intensified by Warren’s criticism of recent mass dismissals of federal workers, particularly targeting both Trump and Elon Musk. She characterised these actions as potentially destabilising to market and worker protections, whilst expressing concern about Senate Majority Leader Chuck Schumer’s handling of recent procedural matters.
Trump has maintained pressure for immediate rate reductions, particularly ahead of his planned April tariff implementation. However, Powell’s Fed has remained steadfast in its data-dependent approach, despite acknowledging the impact of trade costs on inflation models.
The markets have responded to these developments by pricing in three rate cuts by year’s end, though industry veterans, including BlackRock’s Rick Rieder, have highlighted the prevalence of uncertainty in current Federal Reserve communications.