- Markets dipped after reports that Trump was likely to fire Fed Chair Powell but later recovered.
- Trump denied the move was imminent, calling it “highly unlikely” and shifting the focus to a future replacement.
- The president’s mixed messages continue to inject volatility and uncertainty into financial markets.
Markets swung sharply on Wednesday as President Donald Trump denied earlier reports that he intended to fire Federal Reserve Chair Jerome Powell. Stocks initially dipped after a White House official said Trump was likely to remove Powell soon but recovered once the president appeared to walk back the statement.
Trump Floats the Idea, Then Downplays It
According to sources, Trump told Republican lawmakers in a Tuesday meeting that he was considering firing Powell and received their support. A senior White House official confirmed that Trump suggested he “likely will soon” move forward with the decision. But when asked about it Wednesday in the Oval Office, Trump responded, “No, I’m not talking about that,” and added that any changes to Fed leadership would come after the next eight months.
Markets React, Then Stabilize
The initial reports rattled investors. The Dow Jones fell 200 points, while the S&P 500 and Nasdaq 100 both lost around 0.5%. However, those losses were pared later in the day as Trump downplayed the speculation. His reassurance helped stabilize the market, though uncertainty remains over whether further action could still be on the table.
Uncertain Path Forward
Although Trump denied immediate plans to remove Powell, his conflicting signals have kept markets on edge. The president has frequently criticized Powell’s interest rate policies and could still revisit the idea, especially if economic conditions shift or political pressure mounts. For now, markets remain alert to any sudden policy moves from the White House that could affect central bank independence.
