On Tuesday (April. 22), US President Donald Trump backed off from threats to fire Federal Reserve Chair Jerome Powell after days of intensifying criticisms of the central bank chief for not cutting interest rates.
"I have no intention of firing him," Trump told reporters in the Oval Office on Tuesday. "I would like to see him be a little more active in his idea to lower interest rates," he added.
"This is a perfect time to lower interest rates. If he doesn't, is it the end? No, it's not. But it would be good timing," Trump said, adding that Powell could have lowered rates earlier.
The de-escalation drew an immediate thumbs up from Wall Street, as equity index futures jumped by nearly 2% on the resumption of trading on Tuesday evening. Stocks, bonds, and the U.S. dollar slumped on Monday after Trump repeatedly attacked Powell over the Easter holiday weekend for not cutting interest rates further since the president resumed office in January.
Market watchers have said that Trump could be setting up the Fed and Powell to take the blame if the economy falls into a recession this year, which economists increasingly say is likely.
(Source: WSJ, Bussiness Insider, Reuters)
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