Trump vs. Powell: The Tensions at the Federal Reserve Helm

U.S. President Donald Trump has publicly criticized Federal Reserve Chair Jerome Powell, while also asserting he has no plans to remove him from his position. Despite a Bloomberg report suggesting an imminent dismissal, Trump downplayed the possibility, stating it remains highly unlikely unless fraud evidence emerges.

Market reactions included a fall in stocks and the dollar, paired with rising Treasury yields following initial firing speculations. Trump has previously voiced dissatisfaction with Powell for not reducing interest rates, leading to discussions among Republicans about the chair's future. Federal Reserve independence remains a significant concern for lawmakers.

Senate Republican Thom Tillis and others warn that ousting Powell could damage U.S. credibility and market stability. Amidst ongoing disagreements over economic policy, Powell, recently affirmed for a second term by President Joe Biden, intends to fulfill his tenure ending in 2026, while the search for potential successors continues.

(With inputs from agencies.)