In a dramatic shift in tone, President Donald Trump said Tuesday he had “no intention of firing” Federal Reserve Chair Jerome Powell — a day after labeling him a “major loser” and suggesting his removal was imminent.
The reversal comes amid mounting pressure on Powell to lower interest rates, a move the central bank leader has resisted. Speaking during a White House event to swear in the new SEC Chair, Trump said it was “a perfect time to lower interest rates,” though he stopped short of issuing any new demands.
Trump’s softened remarks follow days of whiplash-inducing rhetoric and volatile market movements. On Thursday, he slammed Powell’s handling of inflation, saying his “termination cannot come fast enough.” Markets reacted sharply, tumbling in response to fears of political interference in monetary policy. After the long weekend, the pressure intensified, and the Dow plunged more than 1,000 points Monday.
But the mood on Wall Street brightened Tuesday. Stock futures rallied after comments from Treasury Secretary Scott Bessent hinted at a potential cooling of the U.S.–China trade war. Trump echoed that optimism from the Oval Office, saying he had no plans to escalate tensions with Beijing. Dow futures jumped over 500 points in after-hours trading, while the S&P 500 and Nasdaq futures climbed 1.6% and 1.8% respectively.
Powell has consistently sidestepped political battles, emphasizing the Federal Reserve’s independence. He has not publicly responded to Trump’s criticism, but has reaffirmed that policy decisions will be guided by economic data, not political pressure. Legally, it remains unclear whether the president can remove a sitting Fed chair, although most legal scholars believe such action would require extreme circumstances, such as misconduct.
Since nominating Powell in 2017, Trump has clashed frequently with him, especially on monetary policy. While the Fed cut rates three times last year, Powell has made clear he will not rush further reductions — a position reinforced by the central bank’s concerns over economic uncertainty, including Trump’s unpredictable trade moves.
Inside the administration, there also appears to be discord. While Bessent has praised the Fed’s autonomy, White House economic adviser Kevin Hassett recently suggested reviewing legal avenues to remove Powell, signaling possible divisions on the issue.
For now, Trump’s vow not to fire Powell may provide some relief to jittery investors. But with interest rates, inflation, and trade still in flux, the uneasy relationship between the White House and the Federal Reserve seems far from settled.
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