This is the same thing that happened to Fed Governor Cook last year when Trump tried to fire her for cause without success as we continue to await the US Supreme Court decision on that case.
Given the strong hurdles to fire the Fed Chair or Fed Governors, this is still likely to be a short-lived episode for the market. Nonetheless, the uncertainty will still remain and traders will keep their focus on a potential indictment and the Fed’s Cook case hearing on January 21.
Tomorrow, the focus will turn to the US CPI report. Last month, we got a big downside surprise that triggered a rally in the stock market as lower inflation would give the Fed more conviction to keep cutting interest rates. The data was taken with a pinch of salt though given the shutdown related issues
