"I think having an independent central bank is constitutional. In this process, we need to make difficult decisions. We need to make decisions based on the data we have, not political factors."

Fed Chair Powell, amid Trump's harsh criticism of the Fed, once again emphasized its independence.

Powell said, "It was a great honor to host President Trump. It was a wonderful visit," signaling that tensions between the two sides are beginning to ease.

However, Powell's term runs until May 2026, and the true test for the markets will be the next president. Trump's influence in selecting the new Fed chair, and that person's policy stance, will determine market perception.

In recent months, Trump has harshly criticized Powell's interest rate policies as "wrong" and "damaging to the economy." He even cited the Fed's $2.5 billion budget overhaul in Washington as grounds for dismissal. Tensions peaked during this period.

Last week, Trump inspected the Fed's renovations, met with Powell, and said, "We had a good meeting," but the possibility of Powell's dismissal remains a topic of discussion in the markets.

In recent weeks, rumors that Trump might dismiss Powell led to a 0.7% drop in the S&P 500 and a 0.9% drop in the dollar. This alone demonstrates the markets' sensitivity.

So, what happens if Powell is dismissed?

The Fed's independence being undermined would represent a major crisis of confidence in the markets.

According to Deutsche Bank, in such a scenario, the dollar and indices could decline, with the 10-year Treasury yield rising by 20 basis points and the 30-year Treasury yield rising by 45 basis points. Gold could also rise above its record-breaking $3,400 level.

Of course, this is the most severe scenario. There are other possibilities: Powell could resign, or Trump could announce a new chairman and allow Powell to remain in office until his term expires. These are more moderate scenarios for the market.

Whether the next Fed chair is a "dovish" or a "hawkish" candidate will be a key factor in the markets. If a more dovish candidate is elected under Trump's influence, the market may initially respond positively. However, this could permanently damage the perception of the Fed's independence and jeopardize long-term financial stability.

The question now is: Is the market fully pricing in the Trump-Powell tension? Or is this a major risk that hasn't yet been fully addressed?