Recently, rumors about "US President Trump firing the Fed Chairman" have been circulating in the market, triggering a sharp decline in US stocks. On Tuesday (22nd), Trump himself clarified that he "has no intention" of firing Powell before his term ends next year.
That day, when asked about firing Powell, Trump stated, he has no intention of firing Powell at all, it's all media hype.
"Not at all. Never. The media always makes a mess of things," he said.
Trump said seriously at the swearing-in ceremony of the new SEC Chairman Paul Atkins: "No, I have no intention of firing him."
"I just hope to see him be more proactive in the idea of lowering interest rates. Now is a great time to lower interest rates. " he added.
Trump has recently intensified his criticism of Powell and refused to rule out the possibility of firing him, so his latest remarks represent a dramatic shift in Trump's stance. After Trump's latest remarks, the three major US stock indices collectively rose for the day.
Last week, Trump also harshly criticized Powell, saying he is always "late and wrong," and stated that "the sooner he leaves, the better." On Monday, Trump launched a new round of "attacks" on Powell, calling him a "big loser," and warned that if interest rates are not lowered immediately, the US economy may slow down.
White House National Economic Council Director Kevin Hassett said last Friday that Trump is studying whether he can fire Powell. Although there is no precedent for whether the president has the authority to fire the Fed Chairman, Trump previously confidently stated, "If I want him to leave, believe me, he will leave soon, I am not satisfied with him."
Powell was appointed by Trump during his first presidential term and will serve as Fed Chairman until May 2026. Powell has previously made it clear that, according to the law, the president cannot remove him.
The rumors about Trump firing Powell have attracted much criticism. Some critics and analysts warned that the president removing the traditionally independent Fed Chairman would cause panic in the market. Chicago Fed President Austan Goolsbee warned on Monday that political interference in the Fed could lead to increased inflation and unemployment.
US Democratic Senator Elizabeth Warren also previously warned that if President Trump has the authority to fire Fed Chairman Jerome Powell, the US market will "collapse."
Even Republicans are fed up with Trump's repeated threats. Louisiana Republican Senator John Kennedy said on the 20th: "I don't think any president has the authority to remove the Fed Chairman. The Fed should remain independent."