In a shift that brought relief to financial markets, President Trump publicly stated he has no plans to dismiss Federal Reserve Chair Jerome Powell, despite recent heated exchanges and speculation about his intentions. Trump made clear that, although he desires a more aggressive approach to lowering interest rates, he does not intend to remove Powell from his position, marking a notable change from prior controversial remarks. This reassurance led to gains in U.S. stock futures and the dollar, while gold prices retreated from record highs. The president also indicated that tariffs on China, currently at 145%, are "very high" but will be reduced substantially, though not to zero.

Trump’s comments come after weeks of tumultuous rhetoric, including a public social media outburst calling for Powell's termination. While the president privately considered firing the Fed chair, his recent public stance suggests a recognition of the potential legal and economic consequences. The Federal Reserve's legal framework restricts dismissal to cause, such as misconduct, and markets worry that any aggressive move to remove Powell would undermine the Fed’s independence, causing bond yields to rise and the dollar to weaken. Experts warn that tampering with the Fed’s autonomy could lead to higher borrowing costs and increased market instability, which would adversely impact the economy and the president’s broader agenda.

This development underscores the delicate balance the administration faces in managing trade tensions, monetary policy, and market stability. Trump’s signals of restraint offer short-term relief, but the underlying tensions over Fed independence and trade policy remain critical factors for investors to monitor.