President Donald Trump's renewed calls for Federal Reserve Chair Jerome Powell's resignation have prompted investors to protect portfolios against the risk of higher inflation, as a central bank more willing to lower interest rates could fuel price rises and make lenders demand higher compensation to hold bonds.

A potential ouster of Federal Reserve chair Jerome Powell by U.S. President Donald Trump could "collapse" both the currency and bond markets and would lead to a spike in inflation expectations, Deutsche Bank said on Friday.

Analysts at Deutsche Bank consider the president's removal of Fed chief Jerome Powell "one of the largest under-priced event risks over the coming months."

President Donald Trump’s potential dismissal of Federal Reserve Chair Jerome Powell is a major and underpriced risk that could trigger a selloff in the US dollar and Treasuries, a Deutsche Bank AG strategist said.

Odds of Jerome Powell's removal hit new highs as Trump waves draft firing letter. Political pressure and inflation data drive markets into uncertainty.

On July 16, Rep. Anna Paulina Luna (R-FL) retweeted "confirmed" in a post by journalist Breanna Morello alleging that Federal Reserve Chair Jerome Powell would be fired. Morello's post claimed that Congresswoman Luna had earlier said, "Fed Chair Jerome Powell's firing is imminent."

A Fed chief warmer to cutting rates could have a mixed effect on equities but could weaken the U.S. dollar, increase volatility in the Treasurys market and raise longer-term rates.

President Donald Trump's potential dismissal of US Federal Reserve (Fed) chair Jerome Powell is a major and underpriced risk that could trigger a sell-off in the US dollar and Treasuries, a Deutsche Bank AG strategist says.

Gold, bitcoin, and Treasury yields all rose during the market uncertainty. The drop coincided with tariff worries and President Donald Trump slamming Federal Reserve Chairman Jerome Powell again.