Trump: No plans to fire Powell, now is an excellent time to cut interest rates, U.S. stocks surge after hours

Former President Trump, who had previously criticized Federal Reserve Chairman Jerome Powell for not lowering interest rates quickly enough and even threatened to fire him, stated on Tuesday that although he remains dissatisfied with the Fed's pace of rate cuts, he has no intention of dismissing Powell.

When asked if he confirmed that he was not seeking to remove Powell from his position, Trump replied in the Oval Office: "Absolutely not, never."

"This is just media nonsense. No, I have no plans to fire him. I just wish he would be more proactive about lowering rates."

"Would it be the end of the world if he doesn't? No. But now is indeed the right time. In any case, I have no intention of firing him."

However, Trump reiterated his criticism of Powell.

"We believe now is an excellent time to lower rates, and we hope our chairman acts sooner or on time, rather than lagging behind the situation."

In recent days, Trump has been pressuring Powell to cut rates. Just on Monday, he called Powell a "total loser" and suggested that the Fed's previous rate cuts were intended to help former President Biden.

Last week, Trump stated he couldn't wait to see Powell "fired" and insisted that if he tried to dismiss him, Powell would leave. Kevin Hassett, director of the White House National Economic Council, told reporters last Friday that Trump was considering whether he had the authority to fire Powell, after the president had repeatedly criticized the Fed on social media and in public speeches.

Additionally, before the European Central Bank cut its benchmark interest rate by 0.25 percentage points to 2.25% last week, Trump had harshly criticized Powell, repeatedly complaining that the Fed was not cutting rates quickly enough. Trump had called Powell a "complete loser" and stated, "If I wanted him out, he would be gone quickly," urging for immediate rate cuts, raising concerns about potential interference with central bank independence.

Trump's Change of Attitude Calms Market Sentiment; U.S. Stocks Rally After Hours

Analysts believe this statement aims to calm market tensions and marks a significant shift in Trump's attitude. Previously, he had intensified his criticism of Powell and had not ruled out the possibility of unprecedented actions to remove him, causing market turbulence.

On Monday, as Trump continued to harshly criticize Powell and even threatened to fire him, U.S. stocks, bonds, and the dollar all fell, resulting in a "triple whammy" in stocks, currencies, and bonds, while gold and safe-haven currencies like the Swiss franc surged, with gold prices hitting a new all-time high.

After Trump's statement on Tuesday that he had no intention of firing Powell, the S&P 500 ETF rose 1.2% in after-hours trading, and Apple gained over 2.7%. Brent crude oil fell $1.02 per barrel within five minutes, trading at $66.74 per barrel. The dollar/Swiss franc rose 0.0069 within five minutes, trading at 0.8198. The euro/dollar fell more than 1.0% during the day, trading at 1.1365.

As the White House indicated progress in trade negotiations aimed at reducing the comprehensive tariffs announced earlier this month, U.S. Treasury bonds and the dollar showed greater stability on Tuesday. Although the yield on the 10-year Treasury bond saw little fluctuation, the yield on the 2-year bond rose to 3.82% due to weak auction demand.

According to a U.S. Supreme Court ruling from 90 years ago, the president does not have the authority to dismiss Powell unless he can prove serious misconduct or malfeasance by federal officials. Powell has repeatedly stated that the president does not have the authority to remove him, and he will not leave before the end of his term, which will conclude in 2026.

Earlier on Tuesday, the White House also defended Trump's criticism of Powell, stating that the president "has the right to express dissatisfaction with the Federal Reserve." Powell's analysis suggests that tariffs could lead to stagnation in economic growth and increased inflation, which would limit the Federal Reserve's ability to further cut interest rates, a viewpoint that angered Trump