If President Donald Trump were to fire Federal Reserve Chair Jerome Powell, it could have unintended and severe consequences that reverberate throughout the US economy and global markets.

Republican senators warned Trump not to fire Fed Chair Jerome Powell, citing risks to market stability and the Fed’s independence.

Potential removal of Fed Chair Jerome Powell could disrupt markets, spike inflation expectations, and impact the USD and bonds.

It’s been a volatile week for Treasuries. The 30-year yield breached 5% for the first time since May as enduring inflation pressures prompted traders to pare odds of a September rate cut, while speculation that President Donald Trump might fire Fed Chair Jerome Powell also unnerved markets. ADVERTISEMENT

Reports that President Trump was considering trying to remove Federal Reserve Chair Jerome Powell have had a clear, if modest, effect on the bond market—even after Trump told reporters that he [wasn’t “planning on doing anything.

As of 5am ET Monday, US market futures are down around 1% across the S&P 500, Dow Jones, and Nasdaq, while Asian markets are generally higher with Tokyo a notable exception.