U.S. President Donald Trump said Wednesday he is not currently planning to fire Federal Reserve Chair Jerome Powell but refused to rule out the possibility, raising fresh uncertainty in financial markets.
“I don’t rule out anything, but I think it’s highly unlikely,” Trump told reporters, after months of escalating criticism of Powell’s leadership. “He’s doing a lousy job, but no, I’m not talking about that,” Trump added.
The president’s comments sent the yield on 30-year U.S. Treasury bonds surging above 5% for the first time in decades, while major stock indexes slid and the dollar dropped against the euro.
Trump also signaled that even if he doesn’t act immediately, he would be able to replace Powell when his term ends next year. Powell’s term as chair runs through May 2026, though his term as a Fed governor extends beyond that.
The president has frequently slammed Powell for not lowering interest rates fast enough, labeling him a “numbskull” and a “moron” in recent public remarks.
On Tuesday night, Trump suggested that a proposed $2.5 billion renovation plan at the Federal Reserve could be grounds for dismissal. Asked whether the spending was a fireable offense, he said, “I think it sort of is.”
According to U.S. media reports on Wednesday, Trump told a group of Republican lawmakers he intends to fire Powell and received political support for doing so.
“They expressed approval for firing him. The president indicated he likely will soon,” a White House official told CNBC.
Powell has publicly stated he will not resign and that the central bank’s independence is protected by law.
News of Trump’s remarks rattled financial markets. The dollar dropped 1% against the euro, while gold prices rose as investors sought safer assets.
On Wall Street, the Dow Jones Industrial Average fell 0.2%, the S&P 500 declined 0.3% and the Nasdaq Composite slid 0.4%.
