If Trump fires Jerome Powell and replaces him with someone more politically flexible, “it could be something that would shake up Trump,” the researchers say.

• President Donald Trump called Federal Reserve Chairman Jerome Powell to cut interest rates to avoid an economic slowdown. Still, when it comes to things like consumer goods and housing, “it remains to be seen whether rate reductions can actually reduce bleeding,” the researchers said. Furthermore, if Trump fires the head of the central bank, it could be backed up “spectacular.”

The president wants lower interest rates. That’s no secret. He called on the central bank to cut back on and on. “There could be little inflation, but it’s too late, a major loser, and there’s a slowdown in the economy unless we cut interest rates,” President Donald Trump said. I wrote it Social media refers to Federal Reserve Chairman Jerome Powell.

But it may not be too cut and dry. Neil Dutta, head of economic research at Renaissance Macro, warned that central banks cannot resolve everything when it comes to tariffs and trade wars.

“Please note that the Fed really doesn’t have any tools to offset the trade war,” Dutta said. I said Monday CNBC. “Think about the regions of the economy where trade wars are most affected. They are like durable goods for consumers. They are like housing. These are industries that are actually affected by tariffs.

Customs It can induce inflation, but we still can’t see whether it happens to be a one-off shock to price or something ongoing. Customs duties can cause a Slow downAlso, when consumers and business spending drops, things go down because they cost more. Due to these factors, the Fed is currently in standby mode. You can’t cut interest rates for fear that inflation will become a problem again, but if unemployment becomes a problem, the central bank may have no choice. In any case, according to Dutta, interest reductions may not protect consumer goods or housing From the tariff effects – and if it hasn’t started yet, the slowdown is imminent.

“I think we’re jumping into the recession,” he said. “We’re there, we’re there,” Dutta later said.

He sees housing slower, investment spending decreases and employment ease. The only thing that will stop the economy from falling into a recession is policy change, he said, adding, “If confidence falls out of the bottle, it’s really hard to put it back.”

“This is not an on and off switch with the president. It’s a dial,” continued Dutta. “So if he stops the heat for a week, I mean it can go back to another week, so this uncertainty situation continues to shake up the market.

Things have settled somewhat after Trump suspends in the tariff regime on his release day. But almost two weeks later, the market is still shaking, especially amid Trump’s oral attack on Powell. he I recently said The Fed’s chairman’s closing was not fast enough. And it prompted a debate about whether Trump could actually fire the head of the central bank.

“We’re already in the worst-case scenario of the economy,” Dutta said. If Trump fires Powell and replaces him with someone more politically flexible, “it’s going to be the opposite of Trump and could keep the long-term interest rates even higher than otherwise.”

This story was originally introduced Fortune.com