President Trump send the stock market on a rollercoaster ride after indicating that he was closer to firing Federal Reserve Chair Jerome Powell, before abruptly backtracking on the comment.
The decision to fire Powell, whose term runs until May 2026, was discussed in a meeting with congressional Republicans on Tuesday evening, the President confirmed.
However, he told press in the Oval Office on Wednesday that although he doesn’t ‘rule out anything’ it is ‘highly unlikely’ he’d fire Powell.
‘Unless he has to leave for fraud,’ Trump chimed in referencing $2.5 billion taxpayer-funded ‘lavish’ office renovations that Powell apparently signed off on for his D.C. office.
The President has grown increasingly frustrated with the Fed’s ‘wait and see’ approach to lowering interest rates and has pressured Powell to make cuts.
Firing Powell would likely cause a rout in financial markets who insist the independence of the Fed is critical for stability.
The White House insists that Trump has not yet made a final decision and could still change his mind.
The news of Powell’s possible termination sent the S&P 500 down 0.5 percent, but markets began to recover after Trump appeared to scale back the threat.
President Trump send the stock market on a rollercoaster ride after indicating that he was closer to firing Federal Reserve Chair Jerome Powell
Trump told press in the Oval Office on Wednesday that although he doesn’t ‘rule out anything’ it is ‘highly unlikely’ he’d fire Powell
The news of Powell’s possible termination sent the S&P 500 down 0.5 percent, but markets began to recover after Trump appeared to scale back the threat
The S&P 500 was last down 0.1 percent, the Nasdaq was down 0.2 percent after briefly dropping as much as 0.8 percent.
The Dow Jones Industrial Average, meanwhile, remained flat after briefly dipping on the news.
Firing Powell would be a major test of the President’s legal authority over the central bank and other independent agencies.
Trump is currently conducting an ‘Apprentice-style’ competition to find Powell’s replacement.
Two Republicans are reportedly vying to take over the position.
Kevin Hassett, one of Trump’s closest economic advisers, is emerging as a serious contender, The Wall Street Journal reported.
Former Fed governor Kevin Warsh is also allegedly angling for the position.
Trump passed him over for the role eight years ago when he nominated Powell.
The President has been making threats to oust Powell for months.
