Former U.S. Treasury Secretary Summers: Trump will ultimately not choose to replace Powell

Wallstreetcn
2025.07.17 16:45

Former U.S. Treasury Secretary Summers stated that Wednesday (July 16) witnessed "a small-scale experiment" showing the potential impact of the monetary policy preferred by President Trump. Several U.S. media outlets reported on Wednesday that Trump might be preparing to fire Powell. Summers pointed out that after this news broke, the yield on U.S. two-year Treasury bonds fell, indicating that the market expects the Federal Reserve to potentially shift towards easing monetary policy under new leadership. However, the yield on 10-year Treasury bonds rose. The market declined.

Summers speculated that Trump would ultimately not choose to replace Powell, "because I think the market consequences would be quite direct and severe." He also stated that Treasury Secretary Mnuchin, who has experience in financial markets, "is very aware of the risks that such a move could bring." (Bloomberg)

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