What Happens If a U.S. President Fires the Fed Chair?

The Federal Reserve Act allows for removal 'for cause.' Interpretation is legally contested, but traditional practice suggests this does not apply to policy disagreements. A challenge would likely trigger an immediate constitutional crisis.

Expect extreme volatility (VIX spike). Growth and long-duration assets (tech, REITs) are likely to sell off due to rising risk premiums, while defensive sectors and flight-to-safety assets (gold) should outperform.

The bond market prices in 'sovereign risk' for the first time. Investors stop trusting the Fed to manage inflation appropriately, forcing 10Y and 30Y yields significantly higher as they demand an inflation risk premium.

It is unlikely to 'collapse' instantly but will face extreme volatility. Initially, it may rise due to liquidity stress, followed by a potential medium-term secular decline as global trust in the U.S. institutional framework erodes.

In periods of central bank uncertainty, physical assets (gold), infrastructure with inflation-linked contracts, and high-quality liquid cash equivalents are typically preferred over debt-laden growth stocks.