Recently, a sensitive topic has been hotly debated in the U.S. financial circle: what impact would it have on the U.S. economy if Fed Chair Powell were to be dismissed? This assumption reflects concerns about the independence of the Fed and the potential long-term inflation risks that could arise from it.

Analysis indicates that if there is a sudden change in the leadership of the Fed, it may break the long-standing convention of presidential non-interference in monetary policy. In this case, the Fed is likely to become a political tool, and its inflation control objectives may yield to the demand for reducing government debt costs. Historical experience shows that a sudden change in the central bank's senior management often leads to an additional increase in inflation by 1-2 percentage points in the following two years, with no positive effect on economic growth.

The market has begun to react to this possibility. According to data from inflation-protected bonds, the expected inflation rate for three to four-year terms has risen from 1.5% to 2.36%. This change reflects market concerns about the potential departure of Fed Chair Powell. It is worth noting that inflation expectations have a "self-fulfilling" nature. If the credibility of the Fed is damaged, its long-term commitment to maintaining low inflation may fail, leading to a sustained rise in actual inflation.

Although there are signs of a short-term decline in inflation, the core credibility of the Fed's resistance to inflation largely relies on its independence. If this line of defense collapses, it would be akin to the "braking system" of the economy failing. This risk may not be immediately apparent, but it could concentrate and erupt during a future economic crisis, bringing severe shocks to the U.S. and even the global economy.

Therefore, maintaining the independence of the Fed is not only related to the current economic policies of the United States, but is also key to ensuring long-term economic stability. All sectors should be vigilant against any actions that could undermine the independence of the central bank to ensure the long-term healthy development of the U.S. economy.