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Firing the Fed Chair Would Shake Markets and Undermine U.S. Economy, Experts Warn As President Donald Trump approaches his second term, renewed speculation about the future of Federal Reserve Chairman Jerome Powell is sending tremors through financial markets. Trump has long criticized Powell for not cutting interest rates aggressively enough and has publicly floated the idea of removing him. While no formal move has been made, strategists warn that such a decision would severely damage market confidence and U.S. economic stability. “He would very much like to fire Powell and lower interest rates—that’s very clear,” said Kathy Jones, chief fixed-income strategist at the Schwab Center for Financial Research. “I wouldn’t be surprised if he ignores the advice he’s been given and tries to make it happen.” The independence of the Federal Reserve has traditionally been a cornerstone of U.S. economic policy, and any attempt to politicize it could have far-reaching consequences. On Thursday, Trump renewed his attacks on Powell via social media, dubbing him “Too Late Jerome” for refusing to follow the European Central Bank’s lead in cutting rates. Powell, however, has reiterated the Fed’s cautious approach, saying the central bank will monitor the effects of tariffs and other economic pressures before deciding on further rate moves. When asked whether the Fed would intervene if markets plunged, Powell was direct: “No.” The Fed cut interest rates in September 2024 for the first time since the pandemic began, but has kept them steady throughout 2025. Following Powell’s comments, markets ended Thursday mixed, with the Nasdaq falling slightly and the S&P 500 inching higher. Behind the scenes, White House officials have reportedly advised Trump against removing Powell. Politico reported that Treasury Secretary Scott Bessent warned the move could rattle markets. Legally, the president’s authority to remove the Fed chair remains unclear. Powell has said the law protects the Fed from politically motivated firings. However, a pending Supreme Court case, Trump v. Wilcox, could shift that balance. A ruling in Trump’s favor might expand presidential power and erode protections for independent agencies, potentially clearing the path for Powell’s removal. Despite these developments, some on Wall Street are still brushing off the threat. “Are they taking him seriously or just ignoring the potential problem? Seems like the latter,” said Steve Sosnick, chief strategist at Interactive Brokers. Others, including Democratic Senator Elizabeth Warren, have warned that firing Powell could crash the markets. While Sosnick didn’t go that far, he emphasized the importance of institutional credibility. “We underestimate how vital institutions like a nonpartisan judiciary and an independent Fed are to foreign investors,” he said. Jay Hatfield, portfolio manager at Infrastructure Capital, argued that Trump may have grounds to fire Powell, citing the Fed’s delayed response to surging inflation in 2021. “He absolutely can fire him, and Powell can sue,” Hatfield said. Still, most analysts agree the fallout from such a move would be severe. Jones warned that removing Powell would likely trigger a sharp selloff in both Treasurys and the dollar—behavior more typical of emerging markets than the U.S. “It’s just not something that happens in major developed economies,” she said. “Even if a new chair is well-received, the damage to credibility would already be done. Bond yields would spike, the dollar would fall—you lose the trust of global markets.” U.S. stocks have already been volatile in 2025. On Thursday, the Nasdaq Composite slipped 0.1% to 16,286.45. The S&P 500 rose 0.1% to 5,282.70, while the Dow Jones Industrial Average dropped 1.3% to close at 39,142.23. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Tariff Relief Buoys Markets for Now, but Recession Risks Remain President Trump’s recent tariff adjustments have offered temporary relief to U.S. financial markets, but underlying economic risks are far from resolved. Daniel von Ahlen, senior macro strategist at GlobalData TS Lombard, warns that investors may be underestimating the threat of a recession, which could result in more severe market volatility later this year. In a report shared with MarketWatch, von Ahlen highlighted several troubling indicators. Federal workforce layoffs could strain the job market at a time when hiring has already slowed. Tariffs are expected to raise consumer prices just as income growth loses momentum, potentially weakening household spending power. Additional risks include Chinese retaliatory tariffs that could harm U.S. exports, a shrinking labor force due to tighter immigration policies, and potential fiscal drag if spending cuts are implemented to extend Trump’s first-term tax cuts. “Taken together, these forces may be strong enough to tip the U.S. economy into recession,” von Ahlen wrote, noting that declining real personal income growth leaves little room for policy missteps. Despite lowered growth forecasts from Wall Street economists, market pricing still reflects expectations for robust economic expansion. At the same time, earnings projections remain optimistic, with analysts calling for 8.9% growth in 2025—a figure that would be unlikely in a downturn, where corporate earnings typically stagnate or decline. Further stock market weakness could also weigh on consumer spending, given the growing role equities play in household wealth. Von Ahlen isn’t alone in his caution. Michael Brown, senior research strategist at Pepperstone, echoed similar concerns, pointing to continued trade uncertainty. He noted that new tariffs on sectors like semiconductors and pharmaceuticals are looming, and the broader U.S.–China trade relationship remains tense. Beijing recently halted Boeing jet deliveries, and reciprocal tariff negotiations have made little progress. “I worry markets are underpricing the risks,” Brown said. “We haven’t fully accounted for the inflationary or growth-related consequences these tariffs could trigger, both domestically and globally.” To prepare for a potential recession, von Ahlen recommends rotating into defensive assets. He suggests gaining exposure to utilities through ETFs like the Utilities Select Sector SPDR Fund (XLU), while reducing exposure to cyclical sectors such as financials via the Financial Select Sector SPDR Fund (XLF). Long-term inflation-protected bonds—like those in the Pimco 15+ Year U.S. TIPS Index ETF (LTPZ)—may also offer downside protection. Additionally, he advocates using the Mexican peso to fund long positions in the Japanese yen (MXNJPY), citing the yen’s safe-haven status and relative undervaluation despite recent appreciation. Markets showed renewed volatility midweek. After the White House blocked Nvidia from exporting more AI chips to China without a license, and Beijing suspended Boeing aircraft deliveries, stocks fell sharply. The S&P 500 dropped 1.3%, the Nasdaq declined over 2%, and Nvidia shares plunged nearly 7%. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Wall Street S&P 500 Price Targets: A Market Thermometer, Not a Crystal Ball Wall Street S&P 500 targets are often viewed as forecasts — but in reality, they function more like a real-time mood gauge for the market than a reliable prediction tool, according to one strategist. The recent selloff caught many of Wall Street’s top minds off guard. President Trump’s shifting tariff strategy triggered a sharp downturn, forcing at least a dozen major firms — including JPMorgan, BofA, Goldman Sachs, and RBC — to swiftly revise their year-end S&P 500 forecasts downward. The median target now sits at 5,950, suggesting a more than 10% gain from Monday’s close of 5,405.97. But that’s a far cry from the 6,600 consensus forecast from just a few weeks ago. The tariff shock pulled that estimate down nearly 10% in under two weeks, marking one of the most abrupt sentiment resets in recent memory. Earlier in the year, projections were tightly clustered between 6,400 and 7,100. Today, they’ve blown open to a range of 5,200 to 7,000 — and several firms, including Deutsche Bank and Morgan Stanley, haven’t updated their calls at all. So, can traders rely on these revised targets? Nationwide’s Mark Hackett argues they should tread carefully. “The chances these forecasters get whipsawed are pretty high,” he said. “We saw about a 10% to 11% drop in consensus in a week, and that is very unusual.” Hackett compares S&P 500 targets to a “temperature check” — not a precision instrument. Historical data backs him up: since 2000, Wall Street has, on average, missed the S&P’s year-end level by nearly 14%. The standard method for calculating these targets — multiplying expected earnings per share by the forward P/E ratio — is looking shaky too. Tom Bruce of Tanglewood Total Wealth notes that it’s tough to project earnings right now, with tariffs muddying the waters. “The 90-day tariff pause offers a little clarity,” Bruce said, “but anything beyond that is anyone’s guess. Corporate earnings projections are shaky at best right now.” Indeed, earnings estimates have already softened. The consensus for 2025 full-year S&P 500 EPS now sits at $268.49, down from $271.05 a month ago, according to FactSet. On Tuesday, markets closed lower as traders digested Q1 bank earnings and waited for the next chapter in U.S. trade policy. The Dow dipped 0.4%, the S&P 500 slipped 0.2%, and the Nasdaq finished flat. Bottom Line: For traders, these shifting targets can offer a useful read on sentiment — but leaning too heavily on them for positioning might leave you vulnerable when the market rewrites the script. Watch the fundamentals, track the policy shifts, and treat forecasts like suggestions — not certainties. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

S&P 500 Flashes First ‘Death Cross’ Since 2022, But Signals Remain Unclear The S&P 500 reached a key technical milestone on Monday, marking its first “death cross” since March 2022 — even as the broader market extended gains from last week’s rebound. A death cross occurs when the 50-day moving average falls below the 200-day moving average, often interpreted as a sign that short-term momentum is weakening and a deeper downturn may be forming. This latest signal reflects broader market turbulence in 2025. The Russell 2000 and Tesla Inc. have already triggered similar patterns, reinforcing concerns about market breadth and investor sentiment. However, history suggests the impact of a death cross isn’t always bearish. According to Dow Jones Market Data, the S&P 500 has typically moved higher three, six, and twelve months after previous death crosses — suggesting short-term volatility doesn’t always lead to prolonged declines. Paul Ciana, chief technical strategist at BofA Securities, advises watching whether the 200-day average has fallen over the past five sessions. If so, it may indicate further downside and a potential retest of the recent 2025 low. Others, like Craig Johnson of Piper Sandler, argue that death crosses are lagging indicators. In many cases, they signal that most of the damage has already been done and that a rally may be near. Indeed, recent history paints a mixed picture: the S&P 500 was down a year after the March 2022 death cross, but surged 50% following the same signal in March 2020. For now, markets remain resilient. On Monday, the S&P 500 gained 0.8%, while the Nasdaq Composite and Dow Jones Industrial Average also closed in the green. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Trade Relief and Pessimism Make the S&P 500 Look More Attractive U.S. stock futures were pointing up early Friday, setting the stage for a stronger finish to a rollercoaster week. Much of the optimism stems from President Trump’s unexpected midweek shift on tariffs. Markets are reading that as a sign trade tensions may have peaked — investors see it, at least for now. Still, plenty of caution remains. Skeptics argue that the 90-day tariff pause just delays uncertainty, especially with Chinese imports still facing a steep 145% tariff. Conflicting takes like these are what drive the market — and they’re even showing up within the same firms. Case in point: On Thursday, UBS strategist Bhanu Baweja warned investors to sell into rallies, saying the S&P 500 could fall below 5,000 if the economic impact of tariffs worsens. But on Friday, a different UBS team — led by Global Wealth Management CIO Mark Haefele — took a more bullish stance, upgrading U.S. equities to “attractive” and offering three main reasons why: Adding fuel to the contrarian fire: investor sentiment is deeply bearish. The latest AAII survey shows 58.9% of investors expect stocks to keep falling. That’s down slightly from last week’s peak but still unusually high. UBS points out that such pessimism has often preceded big market rallies, with the S&P 500 posting an average 27% gain in the year following similar sentiment extremes. While UBS still sees risks if tariffs stay in place, they now think the odds of a major economic downturn have dropped. They’ve revised their worst-case S&P 500 target up from 4,000 to 4,500 — a level more in line with a normal recession, rather than a full-blown crisis. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com