Report: Trump asks Republican lawmakers whether Powell should be dismissed and has drafted a termination letter

On Wednesday local time, media reports citing multiple informed sources stated that U.S. President Trump asked Republican lawmakers whether he should dismiss Federal Reserve Chairman Powell.

According to reports, Trump inquired about firing Federal Reserve Chairman Powell during a meeting with House Republican lawmakers in the Oval Office on Tuesday, with some attendees expressing support for the idea. Several of them indicated that Trump hinted he would do so.

This conversation took place after House Republican lawmakers blocked a procedural vote that was intended to advance a cryptocurrency bill supported by Trump.

Insiders at the White House revealed to the media that Trump has begun to "tentatively" raise the possibility of "grounds for dismissal" both publicly and privately, but the White House has not yet formally constructed a legal basis for it.

Following the news, U.S. Treasury yields, gold, and Bitcoin prices rose, while U.S. stocks and the dollar fell:

• The yield on the U.S. two-year Treasury note briefly dropped from 3.92% to 3.9001%, refreshing the day's low, with an overall decline of about 4 basis points during the day. The yield spread between the 2-year and 10-year U.S. Treasury notes briefly surged from around 52 basis points to +55.501 basis points, turning to an overall increase and refreshing the day's high.
• Spot gold briefly rose from around $3,325 to nearly $3,354, refreshing the day's high, with an overall increase of over 0.8% during the day.
• Bitcoin briefly surged by about $1,400.
• The S&P 500 index and Dow Jones Industrial Average turned negative, while the Nasdaq also turned negative again during the day.
• The U.S. dollar index briefly fell from around 98.80 to nearly 98.60, remaining roughly flat for the day. Emerging market currencies narrowed their declines, with the Mexican peso against the dollar refreshing the day's high, briefly rising from around 18.78 pesos to nearly 18.72 pesos.

On Tuesday, when asked whether renovation issues constituted grounds for dismissing the Federal Reserve Chairman, Trump responded, "I think to some extent, yes." Powell must respond to a query letter from the White House Office of Management and Budget by the end of this weekend. This response will be a key indicator of whether the Trump administration will take actual action.

Whether the U.S. President has the authority to dismiss the Federal Reserve Chairman remains a legal gray area. Federal law stipulates that the Federal Reserve Chairman can only be dismissed for "just cause." The market generally believes that if implemented, this move could have serious negative impacts on financial markets.

The Trump administration has been trying to increase pressure on Powell, with some officials publicly accusing the Federal Reserve of mismanagement during the renovation of its headquarters in Washington, which cost billions of dollars. Powell has explicitly rebutted these accusations.

Later on Wednesday, Republican Congresswoman Anna Paulina Luna from Florida posted on X platform: "Heard Powell is getting fired! The news is very reliable." She later posted again: "I am 99% sure the firing is imminent." Luna is one of the lawmakers who voted against advancing the cryptocurrency bill.

Following the news, gold prices continued to rise:

• Spot gold briefly rose from around $3,325 to above $3,370, refreshing the day's high, with an overall increase of 1.3% during the day.
• The dollar against the yen fell over 1%, refreshing the day's low to 147.02 yen
• The S&P 500 Index fell 0.2%, the Nasdaq 100 Index fell 0.6%, both hitting new daily lows, and the Philadelphia Bank Index fell 1%; the European STOXX 600 Index fell 0.6%, also hitting a new daily low.

At the same time, reports indicate that Powell will be "interviewed" on Wednesday.

Reports state that late on July 15, those who participated in the meeting between President Trump and Republican lawmakers expressed support for Trump's move to dismiss Powell. Some members of the House Financial Services Committee plan to meet with Powell late on July 16. Some lawmakers hope to strengthen the independence of Powell's position.

Subsequently, according to the New York Times, informed sources revealed that Trump has drafted a letter to dismiss Federal Reserve Chairman Powell. During the meeting on the night of July 15, Trump waved a draft of the dismissal letter to Republican lawmakers on Capitol Hill