Trump, don't mess around! Wall Street tycoons collectively stand with the Federal Reserve

In the face of rumors about President Trump firing Powell, leaders of the U.S. banking industry are unusually speaking out, emphasizing that defending the independence of the Federal Reserve is crucial for the stability of the U.S. economy and financial system.

This week, as President Trump publicly discussed the possibility of firing Federal Reserve Chairman Powell, CEOs of top Wall Street banks intervened one after another. After Jamie Dimon of JPMorgan Chase was the first to speak out on Tuesday, Goldman Sachs' David Solomon, Bank of America's Brian Moynihan, and Citigroup's Jane Fraser all voiced their support on Wednesday for the central bank to operate independently without interference from the White House or political influences.

The total assets managed by these bankers exceed $12 trillion, and their collective voice highlights deep concerns in the market. Bankers worry that the erosion of the Federal Reserve's credibility could disrupt global markets, weaken the appeal of the dollar and U.S. Treasuries, and trigger unpredictable chain reactions.

Previously, Wall Street Insights reported that Powell would be interviewed on Wednesday, and Trump had drafted a dismissal letter. Following this news, prices for U.S. Treasuries, gold, and Bitcoin rose, while U.S. stocks and the dollar fell. Trump later responded that he did not plan to dismiss Federal Reserve Chairman Powell yet, but still hinted that "justifiable reasons" could be feasible. This series of actions ultimately prompted these bank executives, who typically maintain distance from politics, to step forward.

Rare Collective Voice

Some of the most powerful bankers on Wall Street unanimously believe that an independent central bank is the cornerstone of U.S. economic competitiveness, and intervening in the independence of the Federal Reserve could have a significant impact on global capital flows.

Many industry insiders privately worry that political pressure will undermine the credibility of the Federal Reserve. The core logic is that the status of U.S. Treasuries and the dollar, which are the foundation of global financial markets, is closely tied to the independence and credibility of the Federal Reserve. Once this credibility is eroded, it could weaken the appeal of the dollar and U.S. Treasuries, triggering unpredictable chain reactions.

Goldman Sachs CEO David Solomon stated in a media interview:

I believe the independence of central banks has brought us tremendous benefits, not only in the U.S. but around the world. The independence of the Federal Reserve is crucial, and we should fight to maintain it.

Citigroup CEO Jane Fraser stated in a press release:

The independence of the Federal Reserve is a driving force behind its credibility. This is vital for the efficiency of our capital markets and the competitiveness of the United States.

Bank of America's Brian Moynihan also expressed similar views in a media program, pointing out that a stable central bank is "very important" for the U.S. He added that if Trump were to "prematurely" take action to replace Powell, the market would react.

The day before, according to Wall Street Insights, JPMorgan Chase CEO Dimon warned during a media conference call following an earnings release:

I believe the independence of the Federal Reserve is absolutely critical, not only for the current Federal Reserve Chairman Powell, whom I respect, but also for the next Federal Reserve Chairman. If there are manipulations against the Federal Reserve, it could lead to counterproductive consequences. **

These remarks are consistent with their longstanding position on monetary policy, but their frequent statements at this current juncture highlight the urgency of the situation. Although bank executives emphasized the importance of maintaining the Federal Reserve as an institution, most of them avoided directly criticizing Trump.

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