Trump "changed his tune": he did not plan to fire Powell, now is an excellent time to cut interest rates, and U.S. stocks rose after hours

Written by Zhao Yuhe

Source: Wall Street News

 

U.S. President Donald Trump, who has previously criticized Fed Chair Jerome Powell's failure to cut interest rates sooner rather than soon and even threatened to fire him, said on Tuesday that he had no intention of firing Powell, although he remained unhappy with the Fed's failure to cut rates more quickly.

 

Asked if he confirmed that he did not seek to remove Powell from office, Trump replied in the Oval Office, "Absolutely not, never."

 

"It's a media myth. No, I have no intention of firing him. I just wish he was more aggressive in cutting rates."

 

"If he doesn't, will it be the end of the world? No. But now is the right time. In short, I have no intention of firing him."

 

Still, Trump reiterated his criticism of Powell.

 

"We believe that now is the perfect time to cut interest rates and hope that our chairman is moving ahead or on time, rather than falling behind the situation."

 

Trump has been pressuring Powell to cut interest rates in the past few days. As recently as Monday, Trump called Powell a "total loser" and hinted that the Fed's previous interest rate cut was to help former U.S. President Joe Biden.

 

Last week, Trump said he couldn't wait to see Powell "fired" and insisted that Powell would walk if he tried to get him fired. Kevin Hasset, director of the White House National Economic Council, told reporters on Friday that Trump was studying whether he had the right to fire Powell, after the president repeatedly criticized the Fed on social media and in public speeches.

 

Moreover, before the ECB cut its benchmark interest rate by 0.25 percentage points to 2.25% last week, Trump had lashed out at Powell, repeatedly complaining that the Fed was not cutting rates fast enough. Trump has called Powell a "complete loser" and has said that "if I want him to step down, he'll be gone very quickly" and urged an immediate rate cut, a move that has raised concerns about his possible interference with the central bank's independence.

 

Trump's change of attitude calmed market sentiment and U.S. stocks rose after hours

 

According to the analysis, this statement is aimed at calming market tensions and also marks a clear shift in Trump's attitude. Previously, he continued to increase his criticism of Powell, and at one point refused to rule out the possibility of taking unprecedented steps to dismiss him, causing market shocks.

 

On Monday, as Trump continued to harshly criticize Powell and even threatened to fire, U.S. stocks, U.S. bonds, and the U.S. dollar fell together, and there was a "triple kill of stocks, foreign exchange bonds", and currencies such as gold and the safe-haven Swiss franc accelerated their rise, and gold prices hit a record high.

 

The S&P 500 ETF rose 1.2% in after-hours trading, and Apple rose more than 2.7% after Trump said on Tuesday that he had no intention of firing Powell. Brent crude fell $1.02 per barrel in five minutes to settle at $66.74 a barrel. USD/CHF rose 0.0069 in 5 minutes to 0.8198. EUR/USD fell more than 1.0% on the day to 1.1365.

 

U.S. Treasuries and the dollar showed greater stability on Tuesday as the White House said it was making progress in trade talks to push for the reduction of the sweeping tariffs announced earlier this month. While the 10-year yield was little moved, the 2-year yield rose to 3.82% due to weak auction demand.

 

According to a 90-year-old U.S. Supreme Court precedent, the president has no authority to fire Powell unless he can prove gross negligence or misconduct on the part of a federal official. Powell has said several times that the president has no authority to remove him from office and that he will not leave before the end of his term, which ends in 2026.

 

The White House also defended Trump's criticism of Powell earlier on Tuesday, saying the president "has the right to express dissatisfaction with the Fed." Powell's analysis that tariffs could lead to stagnant economic growth and push up inflation, which would limit the Fed's room for further rate cuts, angered Trump.

 

This article is sourced from Foresight News:

https://foresightnews.pro/article/detail/83064

Respectfully submitted by the AIC Team

April30, 2025