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Bloomberg) -- Concern about US President Donald Trump removing the Federal Reserve chairman will continue to linger over markets and put pressure on the dollar and Treasuries until it is resolved, said George Saravelos, global head of FX research at Deutsche Bank AG.

Speculation over Jerome Powell’s future sparked a selloff in the greenback on Wednesday before Trump downplayed the prospect and sparked a reversal. But the damage done by the brief turmoil is not over, Saravelos said in a Bloomberg TV interview Thursday.

“This underlying story, so long as it lingers, it will act as a big headwind both to the dollar and to fixed income, until it gets resolved one way or another,” he said. A gauge of the dollar was 0.3% higher on Thursday, continuing a rebound after Trump’s denial.

Saravelos said this month that, if Trump were to force Powell out, the subsequent 24 hours would probably see a drop of at least 3% to 4% in the trade-weighted dollar, as well as a 30 to 40 basis point fixed-income selloff. The initial moves seen on Wednesday were similar to those he anticipated, he said.

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“There’s growing concern the Fed’s credibility could be undermined as policy decisions may now face scrutiny over whether officials are responding to political criticism or external pressures. The perception that US monetary policy may be looser than warranted in the next two years will likely weigh on the dollar.”

Still, as the scheduled end of Powell’s term in May approaches, Saravelos expects some of that headwind to fade. The manner of his departure is key, he added.

“As we get closer to the date when Powell anyways is closer to leaving, that at least should remove some of the extreme tail risk, and the risk of institutional duress for the Fed,” he said.

If the process were to be “disorderly,” with Powell potentially asked to leave and refusing to do so, that would be “a really bad scenario,” he said.

--With assistance from Vonnie Quinn and Mark Cudmore.