yeah. the primary motivation for the federal reserve was to moderate interest rates through a central body and prevent bank panics/bank runs.

basically, there is one lever the capitalists decided was OK: interest rate controls. if labor is too strong: raise rates, cause mass layoffs, and expand the reserve army of labor. if the economy is cratering from nobody doing anything: cut interest rates, make borrowing cheaper, and run the risk of speculative bubbles.

trump seems very gung ho about maintaining a permanent bubble economy, so my guess is he would cut interest rates heavily there would be a big surge in VC borrowing, leveraged buyouts, and all manner of crypto schemes. I would also expect the consumer price index to accelerate it's creep upwards, the dollar to become weaker in forex markets, and some narrow increase in exports.

it would run the risk of massive inflation over time, but I don't really believe in "long term" forecasting of the US shitshow anymore. especially if this happens, because it's been the paradigm for over 110 years, so there's no telling how the capitalist class will react to the news that one of them has seized controls from their committee to immediately enrich himself at the longer term expense of their collective class. would expect them to fragment and fight about it.

Technically Powell doesn't unilaterally set the federal funds rate. There is a committee and they have a vote on whether to raise or lower the rates. If he fires Powell and puts in someone who wants to cut rates, the rest of the governors would have to agree. Most people would say this wouldn't happen because the Fed is sort of a sacred technocratic and institutional cow. It shan't be tainted by petty Presidential whims and even if it was, the adults in the room wouldn't go along with it. But then I ask, what if they did?

If the biggest fish don't panic and want to let Trump cook, then "the market" won't crash. I feel like this is how it's been playing out with tariffs. There's some big importer/exporter capitalists out there who will suffer, but all the other big capitalists seem kinda okay with that. And they all share the idea with Trump of power projection. They think we should bully other countries into paying us more and letting us pay less. Even if they lose their shirts in the short term on coffee beans or whatever, if it works, it will pay dividends in the long run. Then the capitalists in other countries, even the ones being tariffed more, are kinda going along with it too, probably more out of thinking this is just a short-term problem. They think that when Trump leaves, everything will go back to normal. It won't.

So if Trump bullies the Fed, that's a major breach of the liberal technocratic firewall. Once again Trump shits on the gentleman's agreement to be a good steward of neoliberalism. That's bad only if the big fish capitalists react as if it's a problem. My bet is that they're kinda curious because it's an opportunity that their kind hasn't had since the 1910s. It's been in place so long that they don't really understand why it's there and the libertarian (abolish the fed) element is stronger than most think. So compromising it might be cool? Let's try it. Rockefeller did okay without a fed, after all.