Turbulence at the Fed: Trump's Tensions with Jerome Powell

President Donald Trump criticizes Federal Reserve Chair Jerome Powell but denies plans to fire him. Despite tensions, legal and political obstacles prevent Trump from easily removing Powell. The situation underscores the importance of maintaining the Federal Reserve's independence to ensure U.S. financial stability.

U.S. President Donald Trump unleashed a fresh burst of criticism against Federal Reserve Chair Jerome Powell on Wednesday, yet denied intentions to dismiss him. The speculation around Powell's potential dismissal, however, jolted the market, causing fluctuations in stocks and Treasury yields.

Trump, who frequently faults Powell for not lowering interest rates, confirmed having discussed the matter with Republican lawmakers. Nevertheless, he downplayed the likelihood of such an action unless fraud was involved, countering criticism related to the costly Fed headquarters renovation.

While Trump tempers dismissal talk, Republican Senator Thom Tillis defended the Fed's independence, warning of the adverse consequences of undermining it. North Carolina Senator Tillis emphasized maintaining U.S. financial stability, corroborated by Senate Majority Leader John Thune and House Financial Services Committee Chair French Hill's remarks against firing Powell.

(With inputs from agencies.)