Donald Trump has privately indicated he is on the verge of firing the Federal Reserve chair, Jerome Powell, rattling Wall Street and renewing questions over the US central bank’s independence.
The US president insisted on Wednesday that it was “highly unlikely” he would dismiss the Fed chair. This followed reports that he had shown a draft letter dismissing Powell to political allies.
Mr Trump has repeatedly and publicly demanded the Fed cut interest rates to spur economic growth. Mr Powell has so far declined, noting that the president’s controversial rollout of tariffs has clouded the outlook for inflation.
Multiple news outlets reported that the president had openly mused about sacking Mr Powell as Fed chair during a meeting with House Republicans, sending stocks sharply lower on Wednesday.
People present at the meeting with Mr Trump expressed approval for Mr Powell’s firing, CBS News reported. The president indicated he would “likely” do so soon, an unnamed White House official told the CNBC financial news network.
Mr Trump has drafted a letter dismissing the Fed chair, according to the New York Times, which reported that he had shown this to congressional Republicans.
At a White House press event, however, the president poured cold water on speculation that he would try to fire Mr Powell imminently. “We’re not planning on doing it,” he said
The benchmark S&P 500 fell sharply into the red after the initial reports, before recovering after Mr Trump’s comments. By lunchtime in New York, it was down just 0.1 per cent at 6,236.64.
Price growth rose in the US last month, as the impact of Mr Trump’s trade policy appeared to boost inflation. The president responded by again calling on the Fed to cut rates, despite policymakers so far holding off primarily due to the threat of a resurgence in inflation.
While the president has urged Powell to resign and attacked him regularly on social media, he does not have the power to fire him over monetary policy. The supreme court signalled in May that it viewed the Fed as legally protected.
Mr Trump initially nominated Mr Powell to serve as Fed chair during his first term. Joe Biden then tapped him to stay on for another four years, until May 2026. Mr Powell has repeatedly stated that he plans to do so.
The US president, meanwhile, has lashed out against his own supporters, calling them gullible “weaklings” for questioning the transparency of a secretive government inquiry into the late high-profile socialite and sex offender Jeffrey Epstein.
Mr Trump is struggling to contain a political crisis within his usually loyal Make America Great Again (Maga) base over suspicion that the administration is hiding details of Epstein’s crimes to protect the rich elite Epstein associated with, which included Mr Trump.
In a lengthy post on his social media website Truth Social, Mr Trump accused his voters on Wednesday of falling for what he called a “radical left” hoax by the opposition to discredit him.
“Their new SCAM is what we will forever call the Jeffrey Epstein Hoax, and my PAST supporters have bought into this ‘bulls**t,’ hook, line, and sinker. They haven’t learned their lesson, and probably never will, even after being conned by the Lunatic Left for 8 long years,” he wrote.
“Let these weaklings continue forward and do the Democrats work, don’t even think about talking of our incredible and unprecedented success, because I don’t want their support any more!”
One of the most dramatic theories circulating among Trump supporters is that Epstein – who killed himself in 2019 while in US custody – was murdered by powerful figures to cover up their roles in his sex crimes against children.
Republican voters and politicians have pressed Mr Trump to publicly release documents related to the case, which have become known as the Epstein Files.
Multiple users on Truth Social responded to Mr Trump’s post, calling for him to release more information. “You’re losing your most loyal followers and voices Mr President,” said one post. “Why are you protecting paedophiles?” said another post.
Mr Trump’s tirade on Wednesday was an angry departure from his previous attempts to placate his backers. On Tuesday, he attempted to divert attention by describing the inquiry as “boring” but said he backed the release of any “credible” files, without specifying what those were.
“I don’t understand why the Jeffrey Epstein case would be of interest to anybody,” Mr Trump told reporters on Tuesday night when asked why his supporters are so interested in the case. “It’s pretty boring stuff. It’s sordid, but it’s boring, and I don’t understand why it keeps going.
“I think really only pretty bad people, including fake news, want to keep something like that going. But credible information, let them give it. Anything that is credible, I would say, let them have it.”
During his election campaigns, Mr Trump fuelled multiple conspiracies by his Maga movement, including that the country was controlled by shadowy “deep state” elites. This has caused deep paranoia among his base, who are now, unusually, questioning their leader over the Epstein controversy.
Last week, the justice department and the FBI announced that a review of the case files had confirmed that Epstein had killed himself, and there was no list of his clients to be made public.
Conservative allies of the president have focused their anger on the attorney general, Pam Bondi, who was leading the case, as she had previously said Epstein’s client list was “sitting on my desk right now to review”.
Several other high-profile conservatives have called for Mr Trump to make public everything known about Epstein. Even his daughter-in-law, Lara Trump, a Fox News host, has been critical, saying: “I do think that there needs to be more transparency on this.”
- The Guardian service.
