Thu Jul 17 23:30:00 UTC 2025: Here’s a summary and a news article rewrite based on the provided text:
**Summary:**
President Trump has repeatedly flirted with firing Federal Reserve Chair Jerome Powell, even going so far as to show lawmakers a draft termination letter. Despite initial market jitters earlier in the year, Wall Street’s reaction to the recent news has been relatively muted. This suggests that either the markets are becoming desensitized to Trump’s threats (the “TACO trade”) or that investors are more focused on the potential for lower interest rates (which Trump desires) than they are on the sanctity of the Fed’s independence. Some analysts worry this could embolden Trump to actually fire Powell, potentially destabilizing the economy if central bank independence is compromised.
**News Article:**
**Wall Street Shrugs as Trump Threatens Fed Chair, Raising Concerns About Independence**
*By [Your Name Here, if applicable]*
NEW YORK – President Donald Trump’s repeated threats to fire Federal Reserve Chair Jerome Powell are raising eyebrows on Wall Street, but the markets’ reaction has been surprisingly muted.
Reports surfaced this week that Trump waved a draft of Powell’s termination letter in front of lawmakers, allegedly citing a costly renovation at the Federal Reserve headquarters as justification. While the dollar and bond markets briefly reacted to the news, the recovery was swift after Trump publicly stated it was “highly unlikely” he would fire Powell.
This nonchalant market response contrasts sharply with the anxiety expressed earlier this year when Trump first floated the idea of dismissing the Fed chair. The initial panic prompted warnings that such a move would undermine the central bank’s independence, which is seen as crucial for maintaining economic stability.
“Markets appear to be getting accustomed to a pattern… in which the Administration threatens fairly radical action, only to dial it back,” noted Jonathan Doh, professor of management at Villanova School of Business. This pattern, known as the “TACO trade” (“Trump always chickens out”), has become a profitable strategy for some investors.
However, some experts are concerned that the relatively calm market response might encourage Trump to take action. “We have to wonder if the earlier report was a trial balloon designed to see how markets might react if Powell were indeed fired,” Steve Sosnick, chief strategist at Interactive Brokers, told CNN. “Quite frankly, the relatively muted reactions from stocks and the 10-year bond might have increased the president’s willingness to take action.”
The muted reaction also raises questions of wether the idea of Fed independence is as revered as once thought.
George Saravelos, global head of FX strategy at Deutsche Bank, recently warned that firing Powell would be seen as a “direct affront to Fed independence,” potentially leading to a collapse in the currency and bond markets. Other analysts fear that investors might simply be more focused on the prospect of lower interest rates, a long-standing demand from Trump, regardless of the potential consequences for the Fed’s independence.
While the markets remain largely unfazed for now, the possibility of a presidential intervention at the Federal Reserve continues to loom, leaving many to wonder if Wall Street is underestimating the potential risks.
First Piper 