If Trump shoots President Fed Powell, what happens next?

A new research note that plays possible scenarios if President Donald Trump decides to say goodbye to the president of the Federal Reserve, Jerome Powell, warns that, regardless of what happens exactly next, “this would be a disaster.”

“We hope, like everyone else, that it would be significantly negative for markets, probably promoting both a capital sale and a counterproductive increase in long -term yields,” written Tobin Marcus and Chutong Zhu of Wolfe Research in the note to customers.

Wolfe Research speculated that the Supreme Court could decide whether Trump has the power to fire Powell for cause.

The firm issued the analysis only a few hours after Powell’s mandate, since the head of the Central Bank looked extremely unstable and then abruptly seemed less.

A High White House official told CNBC on the early Wednesday Trump had told a group of republican members of the Congress the previous night who will probably shoot Powell “soon.”

But during a question and answer session at the Oval office with journalists shortly after the officer spoke, Trump quickly and publicly denied what his White House said.

“We are not planning to do it,” Trump said. “I don’t rule out anything … but I think it’s very unlikely, unless I have to go for fraud.”

Trump is notoriously mercurial and has a long history of dismissal of employees very shortly after saying that they have all their support.

However, in the case of Powell, Trump has complained for months, expelling the president of the Fed for not reducing interest rates despite the president’s demand that the Central Bank does.

The founder of Evercore, Roger Altman, told the “closing bell” of CNBC on Wednesday: “There are many bad ideas out there. But the president triggers the president of the Fed, or, if I said, trying to say goodbye, because that is not clear to me at all that I can succeed, that is one of the worst ideas.”

“It is a terrible idea,” said Altman, who served as the deputy secretary of the Treasury under former President Bill Clinton.

Altman pointed out what he called a “marked” difference between the economic trajectories of countries that have truly independent central banks, such as the United States, and the nations that have “politicized controlled central banks, with the example, by their heads of state.”

For the latter, he summoned Turkey and Argentina as two examples. Both countries have had two -digit inflation rates in recent years.

In addition, Altman said, “I don’t think President Powell agrees to a request to leave” if Trump did one.

“So I think, ultimately, this would be resolved in court,” Altman said.

Wolfe’s research analysts agreed with Altman’s opinion.

“If Trump moves to fire Powell instead of just pressing him to resign, Powell would presumably demand to stop him,” said Wolfe’s research note.

“The first big question is yes, in fact, it would be de facto fired as litigation procedures,” the analysts added.

They pointed out that in several other cases in which Trump had fired the commissioners of independent agencies during his second term, those commissioners had filed demands in search of their restoration.

“Those demands have failed,” the analysts wrote.

“The wrinkle in this case is that Powell is the head of his agency, unlike the other recent shots in independent agencies, which generally occurred in situations where Trump had already appointed a new president of the agency and was saying goodbye to the No Shoir commissioners,” the note said.

“In those cases, the chair could make these shots, but in reality there is no one in the Fed who can say goodbye to Powell,” he said.

The note highlighted three possible scenarios if Trump shoots Powell.

In the first, Powell is still the de facto president of the Fed, while Trump seeks a court order to eliminate it.

In the second, Powell “voluntarily leaves and litigates to be reinstated.”

In the third and most dramatic scenario, Powell tries to remain as president, and Trump seeks his elimination through executive action.

The note says that there was a similar scenario in March when Washington, DC, the police were called to escort the employees of the United States Peace Institute outside their building after the staff of the so -called Efficiency Department of the Government of Elon Musk, accused them of raid.

“It is not necessary to say that Powell is escorted outside the Fed by the DC Police or the Federal Police would be a worrying image for the markets,” Wolfe’s investigation analysts wrote.

If there are Trump litigation by saying goodbye to Powell, it is likely to end in the Supreme Court. The analysts pointed out that most recently indicated in an unrelated case that “sees the Fed differently from other independent agencies when it comes to shooting protections for cause.”

“The Federal Reserve is an exclusively structured and quasi private entity that remains in the different historical tradition of the first and second banks of the United States,” the majority of the Supreme Court wrote in an order that allows Trump to mislead the officials of the other two agencies.

Wolfe’s research analysts said: “We believe that Powell would have a decent opportunity to win in court, but is far from being a safe thing.”

They pointed out that the question of whether the Supreme Court is willing to maintain “protections due to the president of the FED … is a different question than if they are willing to annul the president for what constitutes a cause.”

A postulated scenario in the note is that the Supreme Court would allow the court order of a lower court that block Trump to shoot Powell remains in force, while the case on Trump’s authority to say goodbye to develops.

“That would probably be enough for him to fulfill his term as president,” the note said.