President Donald Trump’s potential move to fire Federal Reserve Chair Jerome Powell could lead to a messy legal battle with uncertain impacts on the central bank, financial markets, and the economy. Legal experts question if Trump has the authority to remove Powell and what would constitute “cause.” A lawsuit and Supreme Court involvement are likely outcomes.

Trump’s recent discussions about firing Powell have caused a stir. After meeting with Republican congressional members and indicating he would move on Powell, Trump later told reporters it’s “highly unlikely.” Legal experts note the challenges Trump would face in removing Powell, with the Supreme Court’s recent ruling emphasizing the Fed’s independence.

Trump’s desire for lower interest rates has intensified his feud with Powell. Despite criticism of the Fed’s policies, Powell and other FOMC officials have not shown an appetite for easing rates. Concerns over Fed independence and reputational fallout from political interference in monetary policy are growing on Wall Street. The potential fallout from firing Powell could impact markets and the economy negatively.

Firing Powell would unlikely change the Fed’s monetary policy approach and may even harden its stance on rates. A rate cut could harm Trump’s goal of lowering finance costs, as seen in past instances where rate cuts led to rising Treasury yields. Political interference in Fed policy could add inflation risks and impact economic activity negatively. Powell and the FOMC are expected to continue making data-driven decisions despite Trump’s pressure.

Read more at CNBC: Unraveling the legal, economic and market ramifications if Trump tries to fire Fed Chair Powell