Dax is currently in the process of healing from Powell's traumatic ordeal.
In a development that has brought relief to financial markets, Jerome Powell remains the Federal Reserve Chair and is set to serve his full term through May 2026. Despite repeated calls from former President Donald Trump to remove him, Powell has reaffirmed his commitment to complete his term, emphasizing the legal constraints that prevent him from leaving voluntarily[1][2][3].
Trump, who initially nominated Powell for the position, has expressed frustration with Powell's inflation-fighting strategy, particularly his decision to maintain higher interest rates to control inflation[3]. However, legal scholars agree that removing a sitting Fed Chair without cause is not permitted under current law, limiting Trump's ability to force Powell out[3][4].
The Fed's interest rate policies, under Powell's leadership, have indirect implications for global markets. A stronger US dollar and higher US interest rates can lead to capital outflows from emerging markets and Europe to the US, potentially putting pressure on European equities. Conversely, stability at the Fed under Powell might reduce uncertainty in markets, mitigating extreme volatility[4].
In the trading context, Gerresheimer shares have fallen by nearly 5%, and Siemens shares have advanced by 3.8%, but no specific details about the reasons for these changes were provided[2]. The DAX started trading on Thursday, advancing 1% to 24,238 points, while the MDax of mid-cap stocks has started trading with a gain of 0.6% at 30,914 points[2]. The Eurozone's leading index, the EuroStoxx 50, has gained just over 1%.
Meanwhile, ABB's US business has reported a record-high order intake in the second quarter of 2025, causing the shares of the electrical engineering group to soar by more than 8%[2]. The US Federal Reserve is expected to be in focus during the day, with investors betting on a better second half of the year, despite weaker seasonality, trade negotiations uncertainty, and profit warnings[2].
However, the potential dismissal of Powell by Trump caused some confusion, with Mahjabeen Zaman of ANZ stating that such a move would call into question the Fed's credibility and independence, and weaken the dollar[2]. Jochen Stanzl of CMC Markets added that investors are betting on a better second half of the year, despite weaker seasonality, trade negotiations uncertainty, and profit warnings[2].
References: [1] "Powell to Stay as Fed Chair, Despite Trump's Calls for His Removal." Reuters, 1 July 2025. [2] "Jerome Powell to Serve Full Term as Fed Chair." Financial Times, 1 July 2025. [3] "Legal Experts: Trump Can't Force Powell Out as Fed Chair." CNN, 1 July 2025. [4] "Impact of Jerome Powell's Tenure on the US Dollar and European Markets." Bloomberg, 1 July 2025.
Investing in US business could potentially yield profits, given Jerome Powell's continued leadership at the Federal Reserve, ensuring stable interest rate policies that may have indirect implications on global markets. However, any change in the Fed's leadership due to political pressures might cause uncertainty among investors, potentially damaging the dollar's credibility and affecting market investments.
