President Donald Trump made clear he has “no intention” of dismissing Federal Reserve Chair Jerome Powell, despite recent public criticisms that had unsettled financial markets. Tuesday’s clarification comes after Trump had labeled Powell a “major loser” and suggested his “termination cannot come fast enough.”
The president’s assurance appeared to calm investor fears about the central bank’s independence, triggering a significant market rebound Tuesday that extended into Wednesday morning.
The S&P 500 rose by 3%, and the Nasdaq increased by 3.7%, reflecting investor relief over the reduced likelihood of political interference with the Federal Reserve. European markets also responded positively, with the Stoxx Europe 600 up 1.9% and Germany’s DAX gaining 2.8%.
Despite the president’s recent criticisms, including calls for more aggressive interest rate cuts, Trump emphasized that he never intended to remove Powell from his position. He expressed a desire for the Fed to act more decisively in lowering interest rates but acknowledged Powell’s role would continue until his term concludes in May 2026.
“I would like to see him be a little more active in terms of his idea to lower interest rates…but, no, I have no intention to fire him,” Trump told reporters in the Oval Office, according to a report from The Wall Street Journal:
U.S. stock futures and the dollar rallied following Trump’s remarks. Gold futures dropped, pulling back from record highs.
Trump’s softer tone on Powell came after he lashed out at the Fed chair, writing on social media last week, “Powell’s termination cannot come fast enough!”
But on Tuesday, Trump played down recent comments by Kevin Hassett, the director of the National Economic Council, that the administration was studying whether the president could fire Powell.
“This is a perfect time to lower interest rates. If he doesn’t, is it the end? No. It’s not,” Trump said.
Trump also addressed trade policy, signaling that tariffs on Chinese goods — currently set at 145% — could be “substantially” reduced, though not fully eliminated. The hint at a possible easing of trade tensions, combined with his reaffirmation of the Fed’s independence, fueled the global market rebound. (RELATED: Trump Softens Tariff Stance On China)
While the immediate market reaction has been positive, analysts warn that ongoing tensions between the Trump administration and the Federal Reserve — along with the prospect of slow-moving trade negotiations between the world’s two largest economies — could continue to weigh on financial markets in the weeks and months ahead.
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