Central Bankers vs. The Dollar

If Donald Trump has his way and recent reports are accurate, Federal Reserve Chair Jerome Powell is considering stepping down from his position. While extremely rare, Fed Chairs resigning before the end of their term isn’t entirely unheard of. Powell’s obligations would ordinarily extend to May 2026.

But if he abdicates, Trump would replace him with an ultra-dove who is committed to aggressively cutting short-term interest rates, delivering the cheap money he craves. This new dove will crush the dollar, eviscerate savers, and send long-term interest rates soaring much higher. 

Markets are watching Powell closely, and pundits are speculating on who might replace him in the extraordinary event that he decides to leave the Fed. But even if he doesn’t resign, the end result of central bankers tinkering with the economy is always net inflationary. Whether you’re talking about the Fed or the Bank of Japan, the end result on a long enough timeline is always an expanded money supply, a currency crisis, and a reset driven by economic catastrophe.

The Fed Funds rate is 4.25%–4.5%. Trump said it should be 1.25%–1.5%. Rumors are that Powell may resign by Monday, so his replacement can slash rates to that level. This would put the nail in the dollar’s coffin, sending long-term interest rates, consumer prices, & gold soaring.

— Peter Schiff (@PeterSchiff) July 12, 2025