Iran War Escalates as US, Houthis Target Ships Near Key Oil Routes 
Israeli Troops Enter Qusra Homes as West Bank Settler Siege Continues 
Japan PM Sanae Takaichi Unveils Growth Plan as BOJ Independence Concerns Lift Bond Yields 
BOJ Rate Hike Expectations Rise Ahead of September Meeting 
European Stocks Steady as U.S.-Iran War, Euro Zone Data Keep Investors Cautious 
US Presses Netanyahu to Condemn West Bank Settler Siege 
Haftar Helps Broker Release of American Hostage Held by ISIS Affiliate 
Asian Stocks Rally as Cooling US Inflation Boosts Fed Rate Outlook 
S&P 500 Retreats From Record High as AI Stocks Slide, Retail Sales Disappoint 
Trump Orders Major Overhaul of US Navy Shipbuilding 
BOJ Seen Holding Rates at 1% While Keeping Inflation Risk Warning 
China Holds Loan Prime Rates Steady for 14th Month as Economic Recovery Remains Uneven 
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U.S. President Donald Trump said he is not planning to fire Federal Reserve Chair Jerome Powell but refused to rule it out, intensifying criticism over Powell’s reluctance to cut interest rates. Speaking Wednesday, Trump labeled Powell a “terrible” chair and blamed him for keeping rates in the 4.25%-4.50% range amid rising inflation from Trump’s tariff policies.
Earlier, a Bloomberg report suggesting Powell’s imminent dismissal triggered market volatility—stocks fell, the dollar dipped, and Treasury yields jumped. Trump denied the report but confirmed he discussed Powell’s removal with GOP lawmakers. While reaffirming the Fed's independence, Trump hinted Powell could be removed for cause, referencing unproven allegations tied to a $2.5 billion renovation of the Fed’s headquarters.
Powell, first appointed by Trump in 2017 and reappointed by President Biden, has stated he will serve his term through May 2026. Legal precedent prevents firing a Fed chair over policy disagreements, requiring clear misconduct or cause. The Supreme Court recently upheld this interpretation.
Trump’s repeated attacks have alarmed economists and lawmakers. Republican Senator Thom Tillis warned that firing Powell would undermine the Fed’s independence and global market confidence. Senate Majority Leader John Thune and House Financial Services Chair French Hill dismissed the likelihood of Powell’s dismissal.
Amid the controversy, Powell asked the Fed’s inspector general to review the renovation project after Trump’s budget chief accused him of wasteful spending. The Fed publicly disputed these claims.
Economists like JPMorgan’s Michael Feroli warned that weakening the Fed’s autonomy could stoke inflation fears and increase borrowing costs. Meanwhile, speculation about Powell’s successor grows, with Treasury Secretary Scott Bessent and Fed Governor Christopher Waller among the rumored candidates.
Trump’s pressure campaign risks destabilizing the Fed at a critical economic juncture.
