US President Donald Trump said that although he was frustrated with the Federal Reserve for not lowering interest rates more quickly, he had no intention of firing Federal Reserve Chair Jerome Powell.
“Never,” Trump told reporters on Tuesday. “The media is always reporting nonsense. No, I have no intention of firing him. I hope to see him be more proactive in lowering interest rates.”
Kevin Hassett, director of the National Economic Council under President Trump, told reporters on Friday that the president is looking into whether he can fire Federal Reserve Chairman Jerome Powell after a series of social media posts and public comments criticizing the Fed.
Last week, just before the European Central Bank cut its benchmark interest rate by a quarter of a percentage point to 2.25% (about half of the 4.25-4.5% rate of the Federal Reserve), the president launched a fierce attack on Powell and posted on Truth Social, “Powell’s firing came too late!”
The US president has repeatedly complained that the Federal Reserve has not cut interest rates fast enough.
Trump restated the criticism on Tuesday, although he insisted that the controversy over his remarks – which shocked the markets – had been exaggerated. Trump said: “We think it’s the best time to lower interest rates and we hope to see our chairman arrive early or on time, not late.”
U.S. Treasuries and the dollar were more stable on Tuesday as the White House said the U.S. government was making progress in trade agreement negotiations aimed at lowering the comprehensive tariffs it announced earlier this month. The yield on the 10-year U.S. Treasury note was little changed, but the yield on the two-year note rose to 3.82% due to weak auction demand.
Powell and his colleagues kept interest rates unchanged this year, after cutting them by a full percentage point in the final months of 2024, waiting for the economy to respond to the government’s policies on tariffs, tax reform, deregulation and immigration.
Most Federal Reserve officials said that the current policy is in good shape and still needs to apply some pressure on the economy to continue cooling inflation, which has been above the 2% target for four years.
Last year, the US economy grew at a healthy rate of 2.8%, but economists now believe that tariffs will cause the economy to slow down in the second half of 2025. Although the Federal Reserve traditionally cuts interest rates in such situations to try to boost the economy, Powell and some of his colleagues have indicated that, due to concerns that tariffs could also reignite inflation, the Fed may need to prioritize the inflation aspect of its dual mandate.
US President Donald Trump said he plans to be “very friendly” to China in any trade talks and tariffs would be reduced if an agreement could be reached, suggesting he may abandon his tough stance on Beijing amid market turmoil.
“Tariffs will come down significantly, but not to zero,” Trump said in Washington on Tuesday. Previously, Treasury Secretary Scott Mnuchin had said the tariff standoff was unsustainable. Trump added: “We’ll be very friendly, they’ll be very friendly, and we’ll see.”
Trump made the remarks as the US stock market and US Treasuries have been battered since April 2 when he announced a full tariff hike, and then he granted a 90-day tariff exemption to most countries. The 145% tariffs Trump imposed on China this year remain in effect, but he made exceptions for computers and popular consumer electronics.
Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis, said: “Trump is panicked by the market slump and the still high US Treasury yields. He needs to reach an agreement as soon as possible. Under such circumstances, China doesn’t need to make any major concessions.”
China has not yet made an official response to Trump’s promise of “friendly coexistence”, but the media outlet Caixin said it was “a sign of Trump softening his stance on his signature tariff policy”.
