The Federal Reserve is the most powerful central bank in the world. It manages the dollar, anchors global interest rates, and plays a central role in financial stability. 

Its independence from political pressure has been treated as non-negotiable since its creation.

But now that independence is being tested. President Donald Trump is said to be looking at options to fire Fed Chair Jerome Powell. 

If Trump follows through, the fallout won’t be limited to the US. It could trigger a chain reaction across global markets, currencies, credit systems, and trade flows.

Is firing the Fed chair even possible?

Legally, Powell can only be removed “for cause,” not for policy disagreements. But that barrier is being challenged. 

Trump’s legal team is testing a Supreme Court case involving other independent agencies.

If the Court weakens or overturns the 1935 Humphrey’s Executor precedent, Trump could gain the authority to remove Powell without cause.

Read more: Trump’s war with the Federal Reserve: inside the legal fight to fire Jerome Powell

Trump has called Powell “too late and wrong” for not cutting interest rates faster, and says he has the power to remove him “real fast.” 

White House advisers are studying whether a firing is feasible under new legal interpretations.

If the Court gives the green light, Powell’s removal could become a reality. And that would come at a big cost.

What happens to the Fed if Powell goes?

Powell is not a one-man central bank. He chairs a 12-member committee that sets monetary policy.

But removing him would likely trigger a wave of resignations. 

That gives Trump the chance to install loyalists, turning the Fed into a political instrument.

The immediate cost would be the collapse of central bank independence.

Investors would no longer trust the Fed to fight inflation or manage the money supply based on economic data. 

The central bank would become part of the executive branch. The result will be a loss of credibility that could take decades to repair.

A prime example is Türkiye, where President Erdoğan removed central bank leaders who resisted rate cuts. 

The result was inflation over 70%, a currency in freefall, and capital exit. 

Of course, the US has more built-in protections, but the direction of travel would be the same.

What would markets do?

The bond market would be the first to react. Investors would assume any replacement for Powell would follow Trump’s push for lower rates, even with inflation not having reached the 2% target yet.

That implies more government borrowing financed by quantitative easing.

Treasury yields would spike as investors dump bonds. Bond prices would fall, creating massive paper losses for banks, pension funds, and insurers.

Liquidity could dry up quickly. Treasuries are used as collateral in financial markets.

If their value drops, institutions would have to deleverage. That could create a credit crunch that could spread globally.

The stock market would likely suffer an initial shock. For reference, the US stock market makes up around 60% of the global stock market. 

A sharp selloff could hit the S&P 500, triggering circuit breakers as seen in past crisis moments. 

There might be a brief rally if a new Fed chair cuts rates, but that wouldn’t last. Rising yields, inflation, and fear of a policy-driven Fed would push equities into more volatile territory.

What happens to the dollar?

In the short term, the dollar might spike. Forced liquidations and margin calls can boost dollar demand temporarily. But longer term, the picture darkens.

The dollar’s strength depends on trust. If investors believe US monetary policy is no longer guided by long-term stability, that trust fades.

Inflation expectations would become unanchored. If markets believe the Fed won’t raise rates to contain rising prices, inflation becomes self-fulfilling. 

The result would be a weaker dollar, rising import prices, and falling real wages.

The dollar is the world’s reserve currency. If it loses that status, it will affect every single economy.

Countries and corporations would start shifting away from dollars in favor of euros, yuan, or commodity-backed assets. De-dollarization would certainly accelerate.

How would this affect the real economy?

The housing market could experience a confusing split. If the Fed cuts rates under political pressure, mortgage rates might drop, giving wealthier buyers a temporary window. 

But rising inflation would offset that benefit. For most people, higher prices, tighter lending standards, and market instability would cancel out any gains. Homeownership would become harder, not easier.

Credit markets would tighten. Treasury yields are used to price everything from car loans to corporate debt.

If those yields are no longer seen as dependable, risk premiums rise.

Companies would face higher borrowing costs. Small businesses that are already sensitive to credit conditions would be hit first.

Foreign direct investment would slow or stop. Multinationals can’t make long-term plans in a country where monetary policy is unpredictable and politicized. 

Finally, global trade flows would alter completely while capital is moving to safer jurisdictions.

Could this break the system?

The Fed’s institutional credibility is one of the last guardrails in the US economic system.

Firing Powell would send a message that even this guardrail is now subject to politics.

Investors and policymakers would begin pricing in “political risk” to US assets, something typically reserved for emerging markets. 

Risk models would be updated. Institutions might begin to consider capital controls or political interference as part of their US exposure.

G7 nations might consider coordinating a response to stabilize global markets if the dollar falters. Some are already discussing alternatives to the current reserve currency system. 

Discussions about having a mixed basket of currencies or special drawing rights (SDRs) are already escalating.

What’s the long-term consequence?

Removing Powell wouldn’t just be about replacing one central banker. It would completely alter how the Federal Reserve operates and what role it plays in the economy. 

If it becomes a tool of the White House, markets will adapt. But perhaps not in a way that benefits the US.

Once trust is lost, it cannot be easily regained.

The US would go from being the most stable economic power to being treated more like a high-risk borrower. 

Inflation would be harder to control. Capital would be harder to attract. Economic growth would become more volatile.

If Powell is fired, the immediate market reaction may be sharp, but the real danger is long-term.

Investors, institutions, and foreign governments would see it not just as a change in personnel but as a change in regime. 

The Federal Reserve would no longer be seen as an anchor for global finance. It would be seen as a tool of politics.

And that would mark the end of an era.

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Pope Francis, the Argentine Jesuit who became the first Roman Catholic pontiff from the Americas, has died, the Vatican announced Monday.

He was 88.

The news was delivered in a video address by Cardinal Kevin Farrell.

“Dearest brothers and sisters, with deep sorrow I must announce the death of our Holy Father Francis,” Farrell said, according to an official translation.

“At 7:35 this morning, the Bishop of Rome, Francis, returned to the house of the Father. His entire life was dedicated to the service of the Lord and of His Church. He taught us to live the values of the Gospel with faithfulness, courage, and universal love, especially in favor of the poorest and the marginalized.”

“With immense gratitude for his example as a true disciple of the Lord Jesus, we commend the soul of Pope Francis to the infinite merciful love of the Triune God,” Farrell added.

Elected the 266th pope of the Roman Catholic Church following the resignation of Benedict XVI in 2013, Francis was born Jorge Mario Bergoglio in Buenos Aires on December 17, 1936.

While Benedict was viewed as a staunch defender of orthodox doctrine, more at ease with books than with crowds, Francis emerged as a pope who frequently smiled, embraced humility, and carried a broad message.

His emphasis on poverty and human suffering resonated with many liberal non-Catholics, and he labeled climate change as a moral issue that needed urgent attention.

Rejecting the privileges associated with his role, he opted for the Vatican guest house over the lavish papal apartments.

He was the first Jesuit pope, the first from the Southern Hemisphere, and the first pontiff from outside Europe in nearly 1,300 years, following Pope Gregory III of Syria in 731.

The son of an Italian immigrant father and an Italian Argentine mother, Francis was the eldest of five children.

As a young man, he worked as a janitor and nightclub bouncer before training as a chemical technician.

He was ordained as a Jesuit priest in 1969 and, by 1973 at age 36, had become head of the Society of Jesus in Argentina and Uruguay — a post he held until 1979.

Pope John Paul II appointed him a bishop in 1992, and six years later, Francis was named archbishop of Buenos Aires. He was elevated to cardinal in 2001.

Francis underwent surgery in his youth to remove part of a lung following a pulmonary illness, though the Vatican said in 2013 that the condition had never impaired his work.

In his later years, the pontiff faced ongoing health challenges, including respiratory ailments and several surgeries.

He was hospitalized for the first time as pope in July 2021, undergoing colon surgery at Rome’s Gemelli hospital for diverticular stenosis — a development that shook the church despite the Vatican’s assurances that the procedure had been scheduled.

He was admitted again in March 2023 with bronchitis, joking to reporters afterward that he was “still alive.”

Just over two months later, he underwent another operation to repair a hernia.

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What used to be an independent body, the Federal Reserve, is now part of the political discussions under the Trump administration.

President Donald Trump has escalated his attacks on Fed Chair Jerome Powell, claiming his termination “cannot come fast enough.” But this isn’t just about interest rates. 

Trump is pushing to reshape the structure of US government institutions, starting with the Federal Reserve. 

But is that even legal? A Supreme Court case already in motion may give him the legal authority he needs.

How did it come to this?

Trump’s public feud with Jerome Powell began years ago during his first term. Though Trump appointed Powell as chair in 2018, their relationship soured almost immediately. 

Back then, Trump wanted low interest rates to boost the stock market. Powell, on the other hand, raised interest rates, citing inflation concerns. 

Throughout 2019 and into the pandemic year of 2020, Trump repeatedly lashed out.

He called Powell “the enemy” and suggested firing him. He even asked White House lawyers to explore legal options for his removal. 

But Powell has always held firm, insisting the Fed must remain independent and data-driven.

Fast forward to 2025, and the feud has reignited. Powell warned recently that Trump’s aggressive tariffs would raise inflation and slow growth. 

Trump responded with renewed threats, accusing Powell of “playing politics” and saying his termination “cannot come fast enough.” 

What’s at stake legally?

At the center of the legal fight is a 1935 Supreme Court ruling known as Humphrey’s Executor.

This case set the lasting precedent that presidents cannot remove officials at independent regulatory agencies without just cause.

The goal was to protect agencies like the Fed from political interference.

But Trump wants that precedent overturned. His administration argues that it infringes on presidential authority under the Constitution. 

According to Solicitor General D. John Sauer, the president should not have to delegate executive power to officials who oppose his agenda.

The legal argument gained traction in 2020 when the Supreme Court ruled 5–4 that the president could fire the head of the Consumer Financial Protection Bureau. 

But that case dealt with a single-director agency. The Fed, which operates under a seven-member board, has so far remained out of reach.

Now, Trump is using a different case. This one involves federal labor boards in order to bring the issue back to the Court.

And this time, the implications are much broader.

Is this Supreme Court case really about the Fed?

The case before the Court involves Trump’s firing of two officials from the National Labor Relations Board and the Merit Systems Protection Board. 

While it may seem unrelated, the outcome could affect how all independent agencies are governed, including the Federal Reserve.

Trump’s lawyers insist the Fed is different. They point to its unique funding, history, and structure. 

In past rulings, the Court has acknowledged that the Fed is “in a different league.”

Still, critics argue that if the Court weakens or overturns Humphrey’s Executor, it opens the door to removing Powell too.

Powell, for his part, has said he does not believe the case will apply to the Fed.

But former NLRB Chair Gwynne Wilcox, one of the dismissed officials, warned the Court that a ruling in Trump’s favor could jeopardize the Fed’s independence and shake investor confidence.

Why the Fed remains a special case

Unlike most agencies, the Federal Reserve is protected by multiple layers of legal and structural insulation. 

Its governors can only be removed “for cause,” and the institution funds itself rather than relying on Congress.

These features were designed to protect monetary policy from political interference.

The Fed also serves a dual mandate: price stability and maximum employment.

Powell and his team have kept rates steady in recent months, waiting for more clarity on how tariffs might affect inflation and growth. 

Trump sees this pause as obstruction.

Still, the Supreme Court has never directly ruled on whether the president can fire a sitting Fed chair.

And while current precedent leans in Powell’s favor, a change in legal interpretation could change everything.

What is Trump’s inner circle saying?

There is some disagreement within Trump’s own team.

Treasury Secretary Scott Bessent has warned that weakening the Fed’s independence could harm financial markets and investor trust. He called monetary policy “a jewel box that must be preserved.”

On the other hand, economic adviser Kevin Hassett has softened his earlier position. In 2021, he said firing Powell would damage the Fed’s credibility.

But now, he says the president’s team is “studying” whether it can be done legally. He cited “new legal analysis” but didn’t provide specifics.

The calculations from Trump’s team are clear: He wants more control, but he also knows that markets could panic if the Fed appears politicized.

Why it matters and what comes next

This isn’t just about Powell or interest rates. It’s about whether presidents can exert direct control over institutions built to be independent. 

If Trump succeeds in getting the Supreme Court to weaken Humphrey’s Executor, it would set a legal precedent that could outlast his presidency.

The current feud, which is all public for everyone to see, is just the tip of the iceberg.

Whatever the outcome, it will certainly have extraordinary implications in legal, political, economic, and institutional domains.

Some say that Trump is attempting the most aggressive executive power expansion since FDR. 

The Supreme Court is expected to rule on the labor board case soon. 

For now, Powell remains in his role until the end of his term in 2026. 

But if the Court grants Trump firing powers, the fight for control of the Federal Reserve will escalate.

If the Court hesitates to touch the Fed, Trump may still pursue alternative legal interpretations, stacking the Fed with loyalists, or aim to reshape its structure via executive orders and appointments.

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As luxury companies navigate the choppy waters of a global economic slowdown, France’s Hermès has once again found stability in its most iconic creations—the Birkin and the Kelly handbags.

The company reported a 7% rise in sales for the first quarter of 2025, narrowly missing analysts’ expectations, yet confirming its status as one of the sector’s most resilient players.

While rivals wrestle with shrinking demand and pricing pressures, Hermès’ timeless strategy and unwavering appeal to ultra-wealthy clientele have helped it stay the course, even as uncertainty looms over tariffs and China’s property-linked slowdown.

Birkin and Kelly bags drive store traffic and cross-category sales

The Birkin bag—named after British actress Jane Birkin—and the Kelly—immortalized by Grace Kelly—have long been regarded as the crown jewels of the Hermès portfolio.

Their reputation as status symbols has only deepened in recent years, with collectors willing to spend tens of thousands of dollars and wait months, or even years, to acquire them.

In a downturn, they do more than just sell well.

They function as anchor products, pulling customers into the store and encouraging purchases in other categories, including scarves, jewellery, and ready-to-wear.

Known in luxury circles as “pre-spend,” shoppers often build a purchasing history with the brand through smaller-ticket items, such as $270 silk ties or $40,000 bracelets, in hopes of eventually being offered a Birkin.

This strategy remains highly effective.

Even as demand in Mainland China showed signs of strain in the first quarter, Hermès posted growth across all regions, including the Americas, where low stock levels in early 2025 were offset by strong March sales.

Management noted that trends have remained positive through early April.

China’s slowdown and tariff threats fail to shake investor confidence

Hermès’ performance in China—a region facing ongoing consumer caution—was notably subdued.

Yet it stood out relative to competitors, many of whom have seen significant slowdowns across Asia.

In the US, where tariffs on European goods are set to increase by 10% beginning May 1 under the Trump administration, Hermès remains confident.

Management believes it can pass those costs on to American consumers—an assertion few other luxury houses can make with such confidence.

That confidence stems from the brand’s unparalleled pricing power.

In a note last week, Jefferies analysts reiterated that Hermès is well-positioned to outperform its peers, describing the company as a “safe haven” amid ongoing turbulence in the luxury sector.

The analysts maintained a “relative preference” for Hermès due to its elite customer base and consistent demand patterns.

Made to last: low production, high margins

A key element of Hermès’ resilience lies in its ultra-controlled production model.

The brand makes no more than 70,000 Birkin bags per year, each handcrafted by a single artisan over 18 to 24 hours.

Kelly bags take a similarly meticulous approach, often requiring 14 to 20 hours of work by a single leatherworker.

This artisanal method, combined with limited availability and no discounting—even during recessions—has helped Hermès maintain some of the highest margins in the luxury industry.

While rivals like Kering have occasionally relied on markdowns to clear stock, Hermès has never discounted its handbags, reinforcing their status as investment-grade fashion items.

The brand’s careful control over supply not only maintains exclusivity but also drives resale value.

Collectors treat the bags like fine art or rare watches, with many appreciating in value over time.

Even secondhand, a Birkin can command a premium of 30–50% over its original retail price, especially in hard-to-find colours or materials.

Wealthy clientele insulates brand from macro shocks

Unlike mass-luxury players, Hermès caters to the global elite.

According to Bain & Co., the top 2% of luxury buyers account for over 40% of sector spending, and Hermès is disproportionately exposed to this tier.

These consumers are relatively insulated from rising interest rates or cost-of-living concerns, meaning their discretionary spending patterns hold firmer when the economy turns sour.

That dynamic was evident in Hermès’ full-year 2024 results, which showed a 17% rise in sales at constant exchange rates—far outpacing the industry.

Even in the US, where demand softened after February due to tariff speculation, Hermès saw signs of recovery in March.

The quiet giant of luxury continues to outperform

While conglomerates such as LVMH pursue high-profile acquisitions and expand into new categories, Hermès remains focused on its narrow but highly profitable core.

It avoids celebrity marketing campaigns and seasonal fashion fads, instead relying on artisanship, scarcity, and heritage to attract customers.

This unwavering consistency has not gone unnoticed by investors.

Hermès now trades at nearly 45 times forward earnings—more than double the average for luxury peers—and recently surpassed a market capitalization of €220 billion, making it Europe’s second most valuable company after LVMH.

Though it may have missed the mark by a hair in Q1, Hermès remains the industry’s north star—luxury at its purest, and most enduring.

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A fortnight ago, investors were counting down the hours to President Trump’s announcement of ‘reciprocal tariffs’. Global stock indices, led by the US majors, were already exhibiting evidence of investor concern.

The Dow and the Russell 2000 (a less popular stock index, but an important indicator of the mood towards US mid-cap, domestically-focused corporations) had both peaked in November.

The S&P 500 and NASDAQ, which both contain a significant weighting towards the tech giants, hit their all-time highs in mid-February. 

Since then, all the US majors sold off, taking them back below levels last seen just after Trump’s election victory on 5th November. They had a mild recovery in the latter half of March.

But it was evident that investors were becoming wary. The feeling was that tariffs could go either way. President Trump could announce a modest baseline tariff on those countries he believed were acting ‘unfairly’.

Or he could do something worse. In the end, he did something much, much worse. 

Most tariffs went through a fairly rapid ‘process’ of being postponed, altered and retargeted. But given what has happened since, it looks as if the 10% baseline tariff across exports from the US’s trading partners is much more in line with what the markets were hoping for.

Although in the absence of a string of successful country-by-country negotiations, these could revert to the original reciprocal rates in three months’ time. 

But one thing now looks certain, and that is that the Trump administration’s real target in all this brouhaha is China.

Add in the bellicose rhetoric and thin skins on both sides, and the tariff tiff has morphed into an all-out trade war. Investors are now trying to work out if this can be resolved, and if so, how long it could take.

Analysts have all come up with opposing theories over which side stands to be worst affected, and who is most likely to blink first. One argument goes that President Trump’s readiness to water down most tariffs is a sign of weakness. Maybe.

Although the fact that he ramped up China’s levies to 145% suggests not. It’s also said that China’s authoritarian regime is in a better position to accept hardships on its citizens in a way that Trump can’t.

But China’s economy is in a poor state, no matter what the data says, and its property implosion means that it can’t rely on its domestic market to replace its export market. 

On the other hand, it looks as if the Trump administration may have panicked when US Treasuries went into meltdown. It could accept a sell-off in equities, but not a threat to the world’s ultimate safe-haven asset.

The yield on the 30-year yield had its biggest weekly jump since the 1980s, even as the US dollar was in freefall. It looked as if something had burst. 

Was China to blame? It seems unlikely that they were wholly responsible for the bond market sell-off. It would largely be self-defeating given how much US government debt they own.

Also, such a move would push up the value of the yuan, which would only make life more difficult for Chinese exporters.

It seems more likely that the dislocation between the dollar and US Treasuries was largely due to massive deleveraging by hedge funds and the shadow banking system. 

Markets were a touch calmer in the week leading up to Easter. But it doesn’t feel like the crisis has peaked yet.

The egos involved are just too big, and the stakes far too high. At some stage, this will be resolved. But risk markets look likely to suffer a lot more pain before things get back on a more even keel.  

(David Morrison is a Senior Market Analyst at Trade Nation. Views are his own.)

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