Trump Eases Off Fed Chair Powell: What It Means for Investors?

President Donald Trump , on April 22, 2025, stated he has "no intention" of dismissing Federal Reserve Chairman Jerome Powell despite recent interest rate policy criticisms, as reported by Reuters.

"I have no intention of firing him," Trump said Tuesday while addressing reporters in the Oval Office.  "I would like to see him be a little more active in terms of his idea to lower interest rates," he said.

The announcement was made following days of market instability driven by Trump's previous comments criticizing Powell as a "major loser" and his frustration over the Fed's hesitancy in cutting interest rates. 

Market Response to Trump's Clarification

After Trump's guarantee, financial markets reacted positively. U.S. equity futures jumped almost 2% in after-hours trading, and the dollar gained against major currencies. Trump's remarks were seen by analysts as a calculated attempt to push the Fed rather than a genuine intention to fire Powell. 

ALSO READ: Can Donald Trump Fire the Fed Chief? Powell’s Fate Hangs in the Balance

Fed's Stance on Interest Rates

In spite of Trump's insistence on rate reductions, the Federal Reserve has left its existing interest rate bracket of 4.25% to 4.50% unchanged. Fed Chair Powell reiterated that monetary policy actions will remain dependent on economic indicators, not political pressure. 

Trade Tensions and Economic Outlook

Aside from monetary policy talks, Trump also sounded hopeful of a trade agreement with China, and tariffs could be "substantially" lowered. This possible relief from trade tensions helped fuel the upbeat market mood. 

President Trump's recent remarks have eased near-term worries over the independence of the Federal Reserve, and financial markets have rebounded. Yet, continued debate over interest rates and trade policies still affects economic projections.