The recent plot twists in Washington have been truly jaw-dropping. Trump initially planned to pressure Powell through judicial investigations to accelerate the rate cuts, but unexpectedly, this pushed him onto the pedestal of "Institutional Guardian." The market immediately responded—probability of Powell resigning in May plummeted, and the support for him to stay until 2028 surged. Ironically, the dovish successor favored by Trump is essentially out of the picture, while hawkish candidates are gaining support against the trend. Political pressure did not achieve the desired outcome; instead, it became the most absurd financial drama of 2026.

After the news broke, the market responded with concrete actions—dollar weakening and gold rising—showing investors' support for the Fed's independence. Powell's public statements gained many supporters, with rare bipartisan criticism of political interference, and three former Fed chairs jointly voiced support. The "rate cut rally" from Trump’s side has completely faded, and in turn, Powell may adopt a more cautious stance to demonstrate neutrality.

From an investment perspective, this means the pace of rate cuts will more closely follow economic data itself. In the short term, safe-haven assets are in demand, with defensive sectors and short-term bonds worth watching. This turmoil actually serves as a reminder of a simple truth—no one should interfere casually with the Fed’s independence, as it is the cornerstone of market confidence.