The US President appeared to back off his threat to fire Powell, after days of criticizing the Fed Chairman for not cutting interest rates.
"I have no intention of firing him. I want to see him be more aggressive in lowering interest rates," Trump told reporters in the Oval Office on April 22.
This statement eased the escalating tension between the White House and the US Federal Reserve (Fed) in recent times. White House Economic Adviser Kevin Hassett said on April 19 that President Trump and his assistants are studying whether they can fire Fed Chairman Jerome Powell. Earlier, Mr. Trump complained on the social network Truth Social that the end of Powell's term "didn't happen fast enough".
The market immediately reacted to the above information. Futures indexes on the US stock market are currently up nearly 2%. The world spot gold price fell more than 40 USD to 3,334 USD an ounce this morning.
However, the US President still expressed dissatisfaction with the Fed's management. "I think now is the perfect time to cut interest rates. We want the Fed Chairman to act early, or promptly, not late," he said.
Previously, in the session of April 21, the stock market, US bonds and USD all plummeted. Investors are concerned about the health of the US economy if the Fed is no longer able to operate independently. Analysts also warned that firing the Fed Chairman would face many legal barriers, as well as cause unpredictable economic consequences.
The disagreement between Trump and Powell has existed for many years, even though it was Trump who nominated Powell for the position of Fed Chairman. Trump gradually became dissatisfied with Powell because the Fed kept raising interest rates, and did not lower them at times when the US President thought it was appropriate to support economic growth. Trump also threatened to fire Powell at that time, but did not do so, partly because the Fed still lowered interest rates, although not as quickly and strongly as the President wanted, and partly because of potential legal obstacles.
Also in the meeting at the White House on April 22, the US President expressed optimism that a trade deal with China could "substantially reduce" import tariffs. He said the new tariffs would "not be anywhere near current levels", but "they will not go to 0% either".
Ha Thu (according to Reuters)