U.S. President Donald Trump clarified on Wednesday that he does not intend to dismiss Federal Reserve Chair Jerome Powell as per the report from Bloomberg earlier. The comment sent stocks to pare some losses after a dip in stock prices and the dollar, while Treasury yields climbed following the initial report.
Despite Trump’s assertion to keep Powell, a source familiar with the situation disclosed to Reuters that the President remains open to the idea of replacing him.
Prior to Trump’s assurance, he had ramped up his criticism of Powell for maintaining interest rates. Trump reportedly explored the possibility of firing Powell in discussions with some Republican lawmakers, who appeared supportive of the move, as per the same source.
It was reported earlier that President Trump is considering removing Federal Reserve Chair Jerome Powell from office, according to a White House official familiar with the matter.
The official, who requested anonymity, said Trump discussed the potential dismissal with Republican lawmakers during a meeting on Tuesday night. Although the president has not made a final decision, the conversation signals serious dissatisfaction with the Fed’s monetary policy direction.
Trump has repeatedly expressed frustration with the Fed’s decision to keep interest rates unchanged, viewing it as a hindrance to economic momentum. The official also noted that preparations are underway to identify a possible successor, even though Powell’s current term does not expire until May 2026.
The meeting where these remarks were made reportedly included GOP lawmakers who earlier voted against a cryptocurrency bill. The news was first reported by CBS News.
If carried out, Powell’s firing could spark legal challenges and significant volatility in financial markets
Earlier in the trading day, the S&P 500 experienced a 0.6% drop but recovered slightly to 0.14% lower. Meanwhile, the Nasdaq Composite fell 0.8% at one point before narrowing its loss to 0.22%. The Dow Jones Industrial Average, having initially lost 264.31 points or 0.6%, managed to stabilize near break-even at -0.03%.
