Chicago – April 24, 2025
President Donald Trump stepped back on Tuesday from his earlier threats to fire Federal Reserve Chair Jerome Powell, after days of harsh criticism aimed at Powell for not lowering interest rates. Speaking from the Oval Office, Trump said, “I have no intention of firing him,” though he emphasized he still wanted Powell to be more proactive in cutting rates.
This shift in tone was welcomed by Wall Street, with equity index futures jumping nearly 2% when trading resumed Tuesday evening. On Monday, markets had slumped, stocks, bonds, and the dollar all took hits, after Trump’s repeated holiday weekend attacks on Powell, urging more aggressive rate cuts.
Evercore ISI Vice Chairman Krishna Guha noted that Trump’s reversal may reflect concerns about Monday’s market dip or could have been part of a larger strategy. Either way, Guha said it’s a positive development, reducing the risk of severe economic consequences like stagflation or a broader financial crisis tied to trade tensions and debt.
Trump also offered a more hopeful outlook on trade with China during the same media session, suggesting that a future agreement could lead to “substantially” reduced tariffs on Chinese goods. He clarified that tariffs wouldn’t be eliminated completely, but they would be far below current levels. This hint at easing trade tensions further lifted investor confidence.
Despite pulling back on his threats to remove Powell, Trump’s criticism of the Fed’s policies hasn’t let up. He maintained that now is the ideal time to cut rates, urging Powell to act promptly rather than lag behind economic trends.
Trump’s earlier rhetoric, which included calling Powell “a major loser” and saying his removal “can’t come fast enough,” had shaken investor confidence. The independence of the Fed is viewed as a key pillar of global financial stability, and Trump’s attacks raised concerns about potential political interference.
