Trump Says He Hardly Can Fire Powell Amid Fed Reform Dispute

President Trump announced Wednesday that he is "very unlikely" to fire Federal Reserve Chairman Jerome Powell. His remarks came hours after it was reported that Trump had discussed firing Powell in a private meeting with House Republicans. This news initially caused a decline in the US stock market and volatility across the bond market. In a meeting in the Oval Office with the Crown Prince of Bahrain, Trump stated that fraud was the only condition under which Powell could be dismissed. This move comes after internal criticism regarding the cost overruns in the $2.5 billion Fed renovation project. The Fed has denied any wrongdoing and requested the inspector general to investigate the matter. News of Powell's possible layoff sent the S&P 500 down 0.5% earlier. Treasury yields also fluctuated sharply before easing the decline after Trump's explanation. The market remains sensitive to signs of the Fed's politicization before Powell's 2026 term ends. Senate Opposes Fed's Independence Receiving Support Republican senators expressed concern about the implications of firing the Fed Chair due to policy disagreements. Senator Thom Tillis warned of serious reputational risks to U.S. financial institutions if the Fed loses its independence. Tillis stressed that putting the Fed under the direct control of the president would be a strategic mistake. Senator John Kennedy stated that Powell has done a "good job" despite some policy disagreements. Senate Majority Leader John Thune added that Trump currently has no definite intention to fire Powell. The House Financial Services Committee canceled a scheduled meeting with Powell due to a voting conflict. Trump nominated Powell in 2017 and Biden reappointed him in 2021. Powell has repeatedly stated his commitment to serving his term until May 2026. Treasury Secretary Scott Bessent confirmed that the official process to seek potential successors has been initiated. Bitcoin rose from $116,800 to $119,200 throughout the day, continuing its rally during the London and New York sessions. The Asian session opened with a slight selling force, but the upward momentum has returned as risk sentiment improves. BTC's intraday volatility reflects an easing of market tensions related to Powell's stance and the prospect of a stable interest rate policy.