US President Donald Trump has temporarily calmed down his rhetoric against Federal Reserve Chair Jerome H. Powell, amid growing concerns about market volatility.
In recent weeks, Mr. Trump revived a threat to fire Mr. Powell, accusing him of playing politics and moving too slowly on interest rates. However, privately, the president is said to be aware that ousting Mr. Powell could lead to extreme financial instability.
According to sources close to Mr. Trump, the president has been cautious about policies that could trigger another financial panic. Investors are already uneasy due to a recent surge in tariffs announced by the administration this month.
Mr. Trump’s decision to announce historic tariffs on nearly all of the country’s trading partners sent financial markets into a tailspin, with stocks plummeting and an alarming sell-off in U.S. government bonds. Mr. Powell has been warning about the potential risks of such actions, emphasizing that the Fed’s independence from political interference is crucial to maintaining economic stability.
The president has already appointed Michelle Bowman as vice chair for supervision, but his focus is on finding a suitable replacement for Mr. Powell when his term expires in May 2026. Kevin Warsh, a former Fed governor, is seen as a leading contender to serve as the next chair.
However, experts warn that Mr. Trump’s actions could erode the Fed’s independence, which has historically been seen as essential to the stability of the economy and the global financial system. The Supreme Court is set to hear challenges related to Mr. Trump’s dismissals of officials at other independent agencies.
Source: https://www.nytimes.com/2025/04/18/business/trump-powell-fed-markets.html