Trump lowers his voice with Fed chairman, USD rises strongly again

Mr. Jerome Powell was appointed by Mr. Trump as Chairman of the Federal Reserve since 2018 - Photo: REUTERS

President Trump said he has “no intention of firing” Federal Reserve Chairman Jerome Powell, just a day after he called Powell a “big loser” and publicly called on the central bank leader to lower interest rates faster.

“I have no intention of firing him,” Mr. Trump told reporters in the Oval Office on April 22. “I just want him to be more proactive with the idea of ​​lowering interest rates.”

Lowering voice after criticism

CBS News reported that Mr Trump thought “the press was overreacting” – although he again urged Chairman Powell to cut interest rates, which remain high after the Fed raised them to curb inflation.

"Now is the perfect time to lower interest rates," Trump said. "If he doesn't do it, is it the end of the world? No, but it's a good time."

Last week, Mr Trump criticized Mr Powell on social media, saying the central bank chairman was “always late and wrong” and “his term could not have ended sooner”, fuelling speculation that the president could seek to replace Mr Powell before his four-year term ends next year.

Chairman Powell has been leading the Fed since 2018 after being nominated by Mr Trump. Former President Joe Biden later nominated him for a second term, which will last until at least May 2026.

It is unclear whether Mr Trump has the authority to fire Mr Powell. Under federal law and previous legal precedent, the Fed board — including the chairman — can only be removed before the end of their term for “good cause”.

However, the Trump administration has previously argued that it has the legal right to fire members of other independent federal agencies, sparking a legal debate.

Last week, White House economic adviser Kevin Hassett said the administration would “study” whether it had the power to fire Mr. Powell.

For his part, Mr. Powell said last year that he would not resign if Mr. Trump asked him to leave his post.

Mr. Powell has been repeatedly criticized by President Trump for not cutting interest rates - Photo: REUTERS

Stocks and the US dollar rose sharply

Asian financial markets recovered strongly in the morning session of April 23, after Mr. Trump announced that he had no intention of firing the Fed chairman, as well as signaled that he would reduce tariffs on China.

This statement helps to ease the concerns that have been plaguing investors in recent days, especially related to the risk of the Fed losing its independence.

Japan's Nikkei rose 2.3%, South Korea's 1.2% and the MSCI Asia-Pacific index (excluding Japan) also rose slightly.

On Wall Street, S&P 500 futures rose 1.8% and Nasdaq rose 2% as investors returned to buying stocks after a sell-off.

The US dollar surged against major currencies as Mr Trump backed away from his call to fire Mr Powell - a move that had caused investors to lose confidence in US assets.

The dollar rose more than 1 percent against the yen to 143.21 yen in early trading, before easing to 141.77. The dollar also rose against the Swiss franc and the euro.

Analysts said Mr Trump's soft remarks helped lift market sentiment, amid investor concerns that political moves could harm financial stability.

Origin of the conflict

The conflict between Mr. Trump and Mr. Powell mainly revolves around interest rate policy. Although the Fed has started to cut slightly after peaking in late 2024, interest rates are expected to remain stable in 2025 because inflation has not yet fallen back to the 2% target.

Mr Trump has repeatedly called on the Fed to lower interest rates further to boost growth and reduce borrowing costs, but the Fed is concerned that easing too soon could spark a resurgence of inflation, especially as Mr Trump’s high import tariffs threaten to raise prices further.

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Source: https://tuoitre.vn/ong-trump-ha-giong-voi-chu-tich-fed-dong-usd-tang-manh-tro-lai-20250423113040516.htm