Donald Trump is demanding Federal Reserve Chair Jerome Powell resign, accusing him of political bias and damaging economic decisions. The call, posted on Truth Social, reflects ongoing tensions over U.

With the caveat that this is a low-probability event, we discuss what the implications of an early departure of Powell would mean for Treasuries and the dollar. We assume that an early departure of Powell would be followed quickly by a replacement super-dove as head of the Federal Reserve.

President Trump’s public demand for Powell’s resignation has ignited fears of a brewing crisis at the Fed, sending crypto investors into high alert.

Fannie Mae and Freddy Mac Chairman William Pulte issued a similar statement amid reports that Powell was considering his resignation.

A Fed chief warmer to cutting rates could have a mixed effect on equities but could weaken the U.S. dollar, increase volatility in the Treasurys market and raise longer-term rates.

Both the S&P 500 (.SPX) and Nasdaq (.IXIC) - and by extension, MSCI's world equities index (.MIWD00000PUS) - retreated from record peaks after traders shaved back bets of U.S. rate cuts this year as prices rose for things such as coffee and couches, while staying steady for tariff-exempted (for now) items such as cars.

The latest federal data release showed nonfarm payrolls increasing by 147,000, edging down but still in line with previous readings, while adjusting April and May figures upward.