In a televised interview aired on May 4, 2025, U.S. President Donald Trump announced he will not seek to remove Federal Reserve Chair Jerome Powell before his term ends in May 2026. This marks a notable shift in tone after weeks of strong criticism over Powell’s stance on interest rates.
Speaking on NBC's "Meet the Press," Trump, despite branding Powell "a total stiff," clarified that he has no intention of intervening before the term concludes. "Why would I do that? I get to replace the person in another short period of time," Trump said. This comes after an April outburst in which Trump expressed deep frustration with Powell’s leadership and hinted at possible dismissal.
Trump’s earlier criticisms had stirred speculation about a potential legal battle. According to the Federal Reserve Act, a chairperson may only be removed "for cause," and legal experts argue any effort to remove Powell prematurely would face substantial challenges in court.
Even as he walks back from any immediate action, Trump has continued to express dissatisfaction with the Fed’s monetary policy. He has repeatedly called for lower interest rates, arguing that high rates have stifled economic momentum and contributed to a slowdown in U.S. GDP growth during the first quarter of 2025. Trump has placed the blame for these economic conditions on the Biden administration, while claiming credit for economic strengths such as falling energy prices and a reduced trade deficit.
In parallel with his monetary criticisms, Trump has also escalated trade tensions by imposing sweeping tariffs on foreign goods. This includes up to 145% duties on certain imports from China and additional tariffs on goods from Europe and other regions. These actions have reignited market volatility to levels not seen since the early days of the COVID-19 pandemic.
Financial markets have responded to these developments with notable caution. On May 5, gold prices climbed due to a weakening dollar and investor uncertainty ahead of the upcoming Federal Reserve policy meeting. Spot gold rose 0.5% to \$3,256.85 per ounce, while U.S. gold futures increased 0.7% to \$3,265.10. The U.S. dollar saw continued weakness, influenced in part by a surge in the Taiwan dollar and broader shifts in Asian currency markets.
As attention turns to the Federal Reserve’s next policy meeting, traders expect interest rates to remain unchanged in the near term. Markets are currently pricing in approximately 80 basis points in cuts beginning in July, buoyed by stronger-than-anticipated job growth data in April.
Trump’s decision not to remove Powell may calm fears of immediate political interference in the Fed’s independence. However, his persistent criticism and sweeping trade measures continue to introduce uncertainty into the economic landscape, with monetary policy decisions now taking center stage in an increasingly volatile global market.