By: Russ Spencer

President Donald Trump appeared to walk back remarks suggesting he intended to fire Federal Reserve Chair Jerome Powell, following a day of mixed messages that left both lawmakers and financial markets watching developments with cautious interest, as was reported by CNBC.

Speaking to reporters late Wednesday, Trump stated, “We’re not planning on doing it. It’s highly unlikely,” according to the report on CNBC. This came just hours after a closed-door meeting with Republican lawmakers during which the president reportedly floated the idea of removing Powell — a move that would break with precedent in the history of the Federal Reserve and test the boundaries of presidential authority.

During the Tuesday gathering, Trump asked a group of Republican legislators for their opinions on dismissing the Fed Chair. After receiving expressions of support, the president indicated he was likely to move forward with the dismissal, according to a senior White House official who spoke with CNBC on condition of anonymity. “The President asked lawmakers how they felt about firing the Fed Chair. They expressed approval for firing him. The President indicated he likely will soon,” the official disclosed.

Further heightening the intrigue, The New York Times reported that Trump had even drafted a dismissal letter for Powell and showed it to those present at the meeting. CNBC reached out to Federal Reserve officials, but a spokesperson declined to comment on reports concerning the president’s discussions with lawmakers.

The meeting took place against the backdrop of political friction on Capitol Hill, with the CNBC report noting that Republican lawmakers had just blocked a procedural vote on cryptocurrency legislation — a measure strongly supported by the White House. Although no direct link has been drawn between the failed crypto vote and the Powell firing discussions, the timing has fueled speculation.

The CNBC report emphasized the unusual nature of Trump’s sustained public criticism of Powell. While presidents have criticized Fed chairs in the past, none have attempted to remove one from office. Powell himself has previously stated that his dismissal “is not permitted under the law,” a stance reinforced by a recent Supreme Court decision underscoring limits on presidential authority to remove Fed officials without cause.

Despite the political theatrics, financial markets responded with muted reaction. U.S. stock indexes leveled off, and Treasury yields — particularly on shorter-term notes — saw a slight decline, reflecting investor confidence that Powell’s position was not under immediate threat.

Adding to the chorus of tempered expectations, Rep. French Hill, Chair of the House Financial Services Committee, told CNBC in a Wednesday interview, “I don’t see” Trump firing Powell. Separately, Treasury Secretary Scott Bessent conveyed a similar sentiment to Bloomberg News, stating he did not anticipate the president taking action against the Fed Chair.

Yet, not all Republican voices echoed that restraint. Rep. Anna Paulina Luna of Florida took to the social media platform X with a provocative statement: “Hearing Jerome Powell is getting fired! From a very serious source,” later declaring she was “99% sure firing is imminent.”

Jerome Powell’s tenure as Federal Reserve Chair began with Trump’s own nomination in November 2018, succeeding Janet Yellen, who subsequently served as Treasury Secretary under former President Joe Biden. The Senate confirmed Powell in early 2019, but his relationship with Trump has often been fraught, with repeated criticism throughout Trump’s first term and into his second.

CNBC has chronicled Trump’s discontent with the Powell-led Fed, particularly in light of the central bank’s cautious approach to interest rate policy. After the Fed lowered rates in late 2024, it has held them steady since. Trump, however, has accused Powell of political bias, alleging that the Fed only cut rates in 2024 to bolster Democratic presidential nominee Kamala Harris.

“That goes for his board too, because his board is not doing the job as they should,” Trump remarked on Wednesday, as quoted by CNBC.

Indeed, several members of the Federal Reserve Board, including Governors Michelle Bowman and Christopher Waller — both Trump appointees — have signaled openness to rate cuts as soon as the Federal Open Market Committee’s late-July meeting. Nevertheless, they have not aligned with Trump’s more aggressive stance, with the president pressing for a dramatic 3-percentage-point reduction in the Fed’s overnight borrowing rate, which currently stands between 4.25% and 4.5%.

As the CNBC report indicated, analysts and policymakers alike await further clarity on whether Trump’s remarks reflect mere political posturing or signal a deeper constitutional challenge regarding the independence of the Federal Reserve. For now, the specter of Powell’s dismissal remains a speculative scenario — one shadowed by political maneuvering, legal boundaries, and the steady gaze of the financial markets.