Trump "changes tone": Not planning to fire Powell, now is the perfect time for rate cuts
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Trump "changes tone": Not planning to fire Powell, now is the perfect time for rate cuts
This statement aims to calm market tensions and marks a clear shift in Trump's stance.
Navigating Web3 tides with focused insightsBy Zhao Yuhe, Wall Street Insights
President Donald Trump, who had previously criticized Federal Reserve Chair Jerome Powell for not cutting interest rates quickly enough—and even threatened to fire him—said Tuesday that although he remains frustrated with the Fed's slow pace on rate cuts, he has no intention of removing Powell from his position.
When asked whether he confirmed he was not seeking to remove Powell, Trump replied from the Oval Office: "Absolutely not. Never."
"That’s media speculation. No, I have no plan to fire him. I just wish he would be more aggressive on rate cuts."
"Would it be the end of the world if he doesn’t? No. But now is clearly the right time. Anyway, I have no intention of firing him."
Nonetheless, Trump reiterated his criticism of Powell.
"We believe this is an excellent moment for rate cuts, and we hope our chair acts ahead of or in line with the curve—not behind it."
In recent days, Trump has continued pressuring Powell to cut rates. As recently as Monday, Trump called Powell a "complete failure" and suggested previous Fed rate cuts were intended to help former President Biden.
Last week, Trump said he couldn't wait to see Powell "removed," insisting that if he tried to fire him, Powell would leave immediately. White House National Economic Council Director Kevin Hassett told reporters last Friday that Trump was exploring whether he has the authority to dismiss Powell, after the president repeatedly attacked the Fed on social media and in public remarks.
Prior to the European Central Bank lowering its benchmark rate by 0.25 percentage points to 2.25% last week, Trump sharply criticized Powell, repeatedly complaining that the Fed was moving too slowly on rate cuts. He called Powell a "total loser" and said, "If I wanted him out, he’d be gone in two seconds," urging immediate rate reductions—a stance that sparked concerns over potential interference with central bank independence.
Trump's Shift Calms Markets; U.S. Stocks Rally After Hours
Analysts say the latest comments aim to calm market tensions and mark a clear shift in Trump’s tone. His earlier relentless attacks on Powell—and refusal to rule out taking unprecedented steps to remove him—had triggered market volatility.
On Monday, amid Trump’s ongoing harsh criticism and firing threats against Powell, U.S. stocks, Treasury bonds, and the dollar all declined together in a rare “triple sell-off,” while gold and safe-haven currencies like the Swiss franc surged, pushing gold prices to a new all-time high.
After Trump’s Tuesday statement clarifying he does not intend to fire Powell, the S&P 500 ETF rose 1.2% in after-hours trading, with Apple up more than 2.7%. Brent crude dropped $1.02 per barrel within five minutes to $66.74. USD/CHF jumped 0.0069 within five minutes to 0.8198. The euro fell over 1.0% against the dollar during the session, trading at 1.1365.
U.S. Treasuries and the dollar showed greater stability on Tuesday as the White House indicated progress in trade talks aimed at reducing the sweeping tariffs announced earlier this month. While 10-year Treasury yields remained largely unchanged, 2-year yields rose to 3.82% due to weak auction demand.
Under a 90-year-old U.S. Supreme Court ruling, the president lacks the authority to fire Powell unless serious misconduct or dereliction of duty can be proven. Powell has repeatedly stated that the president cannot legally remove him and that he will serve out his term, which runs through 2026.
Earlier Tuesday, the White House defended Trump’s criticism of Powell, saying the president “has the right to express dissatisfaction with the Fed.” Powell’s analysis—that tariffs could stall economic growth and fuel inflation, thereby limiting the Fed’s ability to cut rates further—has angered Trump.
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