Is the market under-pricing the risk of Powell being ousted as Fed chair?

Market Reaction to Potential Fed Chair Removal - The market has priced in a risk of the potential removal of the Fed chair, despite it being a low probability outcome [4] - Concerns about eroded policy independence have driven market moves this year [4] - A hypothetical removal of the Fed chair could lead to a sell-off in the dollar and bonds [5] Dollar and Yield Impact - Deutsche Bank suggests a potential decline in the dollar and a spike in yields if the Fed chair is removed [1][2] - Significant outflows from the dollar in knee-jerk fashion, and a big spike in yields at the long end of the curve are expected [3] - A more dovish policy outlook could lead to inflation expectations unanchoring and a subsequent sell-off at the long end [3] Confidence and Economic Impact - Eroded policy independence erodes confidence in the US economy and the value of the dollar [7] - Declines in the dollar are making people buy less things in dollars, leading to less dollars in circulation and less spending in the US markets [6] Equity Market Outlook - A knee-jerk move lower in the equity market is expected, but dip buyers may step in due to a looser monetary policy outlook [8] - A Fed chair picked by Trump would be considerably more dovish and more likely to cut rates, potentially a tailwind for the market in the short term [8] FOMC Dynamics - A new Fed chair's proposed actions may not carry the support of a majority of FOMC members [9][10]