President Donald Trump’s pre-dawn post shook investors’ confidence on Thursday, as he railed against the Chairman of the Federal Reserve, and called for his “termination.” Hours later, the White House insisted the President was not suggesting he would be firing Jerome Powell, whom he installed during his first term, but the Treasury Secretary Scott Bessent reportedly is urging caution.
Pointing to news about the European Central Bank, Trump at 6:12 AM exploded:
“The ECB is expected to cut interest rates for the 7th time, and yet, ‘Too Late’ Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete ‘mess!'” Trump exclaimed.
“Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS,” he insisted, although some consumers may disagree. “Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now.”
“Powell’s termination cannot come fast enough!” Trump concluded.
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The White House quickly jumped in.
“A White House official tells me today this post should not be seen as a threat to fire Powell,” reported CNBC’s Megan Cassella. “It’s more of an airing, or re-airing, of grievances and frustrations with the central bank chair. And the President is looking forward to the scheduled end of Powell’s term.”
Reuters reported that Christopher Hodge, Chief US Economist for Natixis, said: “So previously I thought the odds were very much against Trump trying to remove Powell, but my confidence has faded. Trump seems more comfortable than expected with a slowing economy and equity volatility and the tariff policies are much more onerous than anticipated, even if they have been walked back a bit. The bottom line is the parameters of potential policy outcomes has widened and while I still think Powell will be retained until his term ends, I am less certain that I was previously.”
Journalist and author Charles Fishman called Trump’s post, “a frontal attack on Jay Powell, chairman of the Federal Reserve, whose independence is enshrined in law—and who is one of the few forces holding the US economy together in the face of White House tariff chaos.”
“Trump can’t fire Powell. But is shouting like he might try,” Fishman writes.
Trump may try, but some say he may need help from the U.S. Supreme Court.
Meanwhile, barely two weeks ago, reports stated Bessent was thinking of quitting.
“Treasury Secretary Scott Bessent may be planning to cut and run after Donald Trump’s disastrous ‘reciprocal tariff’ announcement earlier this week,” The New Republic reported. “During an appearance on MSNBC’s Morning Joe Friday, contributor Stephanie Ruhle reported that the key Cabinet member is already looking for an escape hatch.”
“My sources say that Scott Bessent is kind of the odd man out here and, in the inner circle that Trump has, he’s not even close to Scott Bessent or listening to him,” Ruhle said, TNR reported. “Some have said to me, he’s looking for an exit door to try to get himself to the Fed, because in the last few days he’s really hurting his own credibility and history in the markets.”
Last week, things apparently got more heated.
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“Wall Street prizes stability, which is why Trump’s shambolic tariff rollout has wiped out trillions of dollars of market value,” Vanity Fair reported last week. “Executives say the on-again, off-again tariffs are evidence of a civil war engulfing Trump’s economic policy team. According to sources close to the White House, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick have been at odds over a tariff plan, with Bessent urging discipline and Lutnick encouraging Trump to go big. ‘The real war is between Howard and Scott,’ one of the sources said.”
And now, Bessent reportedly is urging caution on firing Powell.
According to a Politico report on Thursday, Bessent “has repeatedly cautioned White House officials that any attempt to fire Federal Reserve Chair Jerome Powell would risk destabilizing financial markets, according to two people close to the White House granted anonymity to share details of private discussions.”
Adding some insight, Politico notes that “Bessent’s private message reinforces what President Donald Trump already knows but comes as the president’s anger with the Fed chair is growing because Powell hasn’t shown signs that he will cut interest rates soon. It also comes against the backdrop of widespread market turmoil over the administration’s far-reaching trade war.”
Not only has Powell not cut interest rates — which he historically has been very caution on doing — but CNN Business reported Thursday afternoon that mortgage rates just saw “the largest one-week jump” min over a year, and are have now climbed to the “highest level in two months as Trump’s tariffs continue to rock markets.”
Responding to Politico’s report, hedge fund founder and chief investment officer Spencer Hakimian writes, “Bessent hating his new job of being a full time babysitter. Just cleaning up Trump, Lutnick, Navarro, etc. diaper all day long.”
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