President Donald Trump’s recent assertion that he has “no intention” of firing Federal Reserve Chair Jerome Powell reflects a pragmatic acknowledgment of economic and institutional constraints rather than voluntary restraint, according to Nigel Green, CEO of deVere Group, a major global financial advisory firm.
Green’s analysis follows Trump’s mixed signals this week, which initially rattled markets before a partial retreat eased investor anxieties.
Trump on Monday lambasted Powell as a “major loser” and urged the Fed to implement “pre-emptive” interest rate cuts, reviving his long-standing criticism of the central bank’s policies. By Tuesday, however, he walked back suggestions of ousting Powell, stating, “I don’t want to talk about that because I have no intention of firing him.” Global markets responded swiftly: U.S. and European equity futures climbed, the dollar strengthened, and Treasury yields dipped, while gold retreated from record highs.
Green attributed the rebound to investors pricing out political risk. “Markets were seriously weighing the possibility of Powell being fired. The moment that risk was pulled off the table, capital surged back into risk assets,” he said. The deVere CEO emphasized that Trump’s reversal was less an act of deference than a recognition of the severe consequences of destabilizing Fed independence. “Firing Powell would trigger capital flight, crush the dollar, and erode confidence in U.S. institutions,” Green noted.
The episode underscores broader concerns over political pressures on the Fed, which has faced scrutiny for its stance on interest rates ahead of the November election. Trump’s earlier suggestion that he could dismiss Powell before his term ends in 2026 sparked alarm among lawmakers and investors, prompting Senator John Kennedy, a Republican on the Senate Banking Committee, to publicly defend the Fed’s autonomy. “That statement wasn’t just for show,” Green said. “It was a coordinated signal that firing Powell was a bridge too far.”
Despite the tempered rhetoric, Green warned that Trump’s calls for rate cuts would persist, injecting uncertainty into markets. “Every time he pressures the Fed, investors will question if another clash is looming,” he said. Nevertheless, Green doubts Trump would risk the economic fallout of removing Powell, citing the president’s focus on buoyant markets and a stable dollar. “It would be political and economic self-sabotage,” he said.
The confrontation highlights the fragile balance between political agendas and central bank independence. While Powell has maintained his policy course amid mounting criticism, Green argued the chair’s resolve has reinforced market trust. “Powell has stood firm under extreme pressure,” he said. “Markets still trust him and the president, whether he admits it or not, trusts the market.”
As the election approaches, the Fed’s decisions will remain under a political microscope. Yet the swift market rebound following Trump’s reversal suggests investors still view institutional guardrails as durable for now. The saga serves as a reminder of the high stakes entwined in perceptions of central bank autonomy, where even rhetorical threats can ripple through global finance before reality prevails.
