Trump says he has ‘no intention of firing’ Fed Chief Powell, global markets surge

US President Donald Trump on Tuesday, April 22, said that he is not planning to fire Federal Reserve Chair Jerome Powell after consistently criticising the central bank for not cutting interest rates.

“I have no intention of firing him,” Trump told reporters in the Oval Office on Tuesday, adding, “I would like to see him be a little more active in terms of his idea to lower interest rates.”

As Trump’s stance softened after threatening to fire the Fed Chief for days, markets sighed with relief and immediately jumped.

Asian markets rose on Wednesday, April 23, with Japan's benchmark Nikkei 225 gaining 1.7% in morning trade to 34,797.22, Australia's S&P/ASX 200 surging 1.6% to 7,943.00 and South Korea's Kospi gaining 1.2% to 2,515.19. Meanwhile, Hong Kong's Hang Seng advanced by 1.7% to 21,927.92 and the Shanghai Composite remained flat at 3,298.33.

Equity index futures on Wall Street climbed almost 2% on Tuesday evening. The US S&P 500 climbed 2.5% on Tuesday, while the Dow Jones Industrial Average surged by 2.7%. The Nasdaq also gained 2.7%, and the three indices more than made up for the losses on Monday.

Stock markets, along with bonds and the US dollar, plunged on Monday after Trump’s repeated criticisms of Powell for not cutting interest rates further since Trump took charge of the presidency in January 2025.

“Whether this reflects Monday’s brutal foretaste of what would happen in markets if he did try to fire Powell, or was the plan all along, it is a clear positive," wrote Evercore ISI Vice Chairman Krishna Guha, as per a Reuters report. “It materially reduces the likelihood of worst-case outcomes including stagflation and the morphing of the tariff crisis into a sovereign debt crisis, though these risks remain.”

Trump’s ‘eased’ stance

Trump on Tuesday said that while a deal with China could result in substantially lower tariffs on Chinese goods, it would still not be zero. He suggested that in a final deal, the tariffs on Chinese goods would not "be anywhere near" current tariff rates, but "it won't be zero," he added.

Furthermore, US Treasury Secretary Scott Bessent on Tuesday said that the ongoing tariff war with China is unsustainable and de-escalation is expected.

While Trump has backed off from the threats on Powell for now, his criticisms remain the same. "We think that it's a perfect time to lower the rate, and we'd like to see our chairman be early or on time, as opposed to late," the Reuters report quoted Trump as saying.

The tussle with the Fed Chief existed even during Trump’s first term as the US President. After Trump made Powell, who was a Fed Board of Governors member back then, the head of the central bank, he soon battled with interest rate increases under Powell.

Although the Federal Reserve Act of 1913 under the central bank will not allow Trump to fire Powell, as per the Fed Chief, Trump said that he can, in fact, fire him if he wants to.

Way forward

Wall Street participants are now hopeful that the financial markets will continue to surge as Trump may negotiate deals with other countries to lower his tariffs. However, if these deals don’t become a reality soon, a recession might be on the cards, as expected by many strategists.

On Tuesday, April 22, the International Monetary Fund decreased its forecast for global economic growth this year to 2.8%, down from the previous prediction of 3.3%.