Barclays: Firing Powell Could Backfire

According to a report by Jinse Finance, the Barclays rates strategy team has warned in its latest report that dismissing Federal Reserve Chair Jerome Powell would not accelerate the FOMC’s rate-cutting process; on the contrary, it could trigger a policy backlash. The report states: “If the market questions the Fed’s independence, leading to heightened inflation expectations and a rise in long-term yields, the FOMC may even extend its pause or resume rate hikes.” The strategists believe that even appointing a new Fed chair would be unlikely to substantially ease monetary policy, as consensus would still need to be reached with the other 11 FOMC voting members. (Jin10)