In a surprising shift of tone, President Donald Trump has clarified that he has “no intention” of firing Federal Reserve Chair Jerome Powell, despite a series of recent public outbursts accusing Powell of dragging his feet on lowering interest rates.
“The press runs away with things. No, I have no intention of firing him,” Trump told reporters Tuesday, adding, “I would like to see him be a little more active in terms of his idea to lower interest rates.”
The comment comes just days after Trump lashed out on social media, calling Powell a “major loser” and stating, “Powell’s termination cannot come fast enough.”
Trump’s backtrack signals a cooling of tensions — at least temporarily — following an escalating feud with Powell over interest rates and economic policy.
Last week, Powell warned that Trump’s aggressive tariff strategies could trigger higher inflation and slower growth, prompting the Fed to hold interest rates steady. That warning didn’t sit well with the president.
“I’m not happy with him. I let him know it. If I want him out, he’ll be out of there real fast — believe me,” Trump said last Friday.
Even White House adviser Kevin Hassett confirmed the administration was exploring legal options to remove Powell — a move many experts believe would shake investor confidence and erode the Fed’s independence.
Powell, whose term runs through May 2026, maintains that he cannot legally be removed for policy disagreements. A case currently pending before the U.S. Supreme Court could test the president’s authority to remove board members at independent federal agencies — and could set a precedent for the Fed.
“I don’t think that’s a case that will apply to the Fed,” Powell said, but acknowledged the central bank is “monitoring it carefully.”
Markets didn’t respond positively to Trump’s pressure campaign:
The financial community values the Fed’s independence — especially during volatile periods when central bank decisions can sway global markets, currency stability, and investor confidence.
The Federal Reserve’s stance on interest rates has ripple effects worldwide:
While Trump may have paused his campaign to remove Powell, the tension highlights a deep divide between political goals and central bank independence. With global markets on edge and inflation concerns growing, the Fed’s next move — and Trump’s response to it — could shape monetary policy and investor sentiment worldwide.
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