Wells Fargo(US:WFC) Xin Lang Cai Jing·2026-01-12 18:01Core Viewpoint - Wells Fargo's strategists warn that if the U.S. Supreme Court allows President Trump to dismiss Federal Reserve Governor Lisa Cook, the market reaction will be significantly more severe than recent events [1] Group 1: Market Reactions - The team led by Michael Schumacher believes that such a ruling would be a critical blow to the independence of the Federal Reserve, potentially leading to a market sell-off [1] - The market is currently on alert but appears to be waiting for concrete actions [1] Group 2: Expected Market Changes - If the Supreme Court rules in favor of the Trump administration, the long-term breakeven inflation rate is expected to rise by approximately 10-20 basis points [1] - The market may price in an additional 10-20 basis points of Federal Reserve monetary easing by the second half of 2026 [1] - The yield on 10-year U.S. Treasury bonds is projected to increase by 5-10 basis points, while the 30-year yield may rise by 10-20 basis points, steepening the yield curve [1] - The yield on 10-year German government bonds is anticipated to decrease by about 5 basis points [1] Group 3: Currency and Commodity Impacts - Implied volatility for U.S. interest rates and certain foreign exchange pairs is expected to surge [1] - The U.S. Dollar Index is predicted to decline by 1.5%-2% within "a day or two" [1] - Gold prices are expected to rise, but the increase may not exceed 5% [1]