Latest news with #Powell
Yahoo
6 minutes ago
- Business
- Yahoo
Dollar Falls Back on Apparent Trial Balloon for Firing Fed Chair Powell
The dollar index (DXY00) on Wednesday rallied to a 3-week high but then backed off and ended the day down -0.21%. The dollar sold off on Wednesday after President Trump appeared to float another trial balloon regarding the potential firing of Fed Chair Powell. Mr. Trump suggested to House Republicans he met with on Tuesday that he wanted to fire Mr. Powell, but he then denied that intention Wednesday after the markets reacted negatively to emerging reports of what Mr. Trump had told those lawmakers. The dollar fell on the Powell news, as a political takeover of the Fed could spook foreign investors and encourage a run on dollar-denominated stocks and bonds. More News from Barchart Gold and Silver Are Grinding Sideways. Here's What Could Change That, and When It Might Happen. Dollar Rallies on Higher T-note Yields Dollar Rallies to 3-week High Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. The dollar was also undercut by the soft PPI report and Wednesday's -3 bp decline in the 10-year T-note yield. Wednesday's June PPI report was favorable, as both the month-over-month and year-over-year figures were better than expected, suggesting that tariff inflation has not yet hit the producer level. The PPI report sparked some inflation optimism after Tuesday's mixed CPI report. Specifically, the June final-demand PPI was unchanged m/m and +2.3% y/y, which was weaker than expectations of +0.2% m/m and +2.5% y/y. The June core PPI report of unchanged m/m and +2.6% y/y was weaker than expectations of +0.2% m/m and +2.6% y/y. The year-over-year figures of +2.3% (nominal) and +2.6% y/y (core) were down from the revised May figures of +2.7% and +3.2%, respectively. Wednesday's June US industrial production report of +0.3% m/m was slightly stronger than market expectations of +0.1%, and May was revised higher to unchanged from -0.2%. The June US manufacturing production report of +0.1% m/m was slightly stronger than expectations of unchanged. The July New York Fed services business activity index rose to -9.3 from -13.2 in June. The Fed's Beige Book survey of the US regional economies showed that US economic activity "increased slightly between late May and early July.' The report said, "That represented an improvement over the previous report, in which half of the districts reported at least slight declines in activity." The report added, "Uncertainty remained elevated, contributing to the ongoing caution by businesses." Regarding inflation, the Beige Book stated that all districts reported price increases, with businesses experiencing "modest to pronounced input cost pressures related to tariffs." The report added, "Many firms passed on at least a portion of the cost increases to consumers through price hikes or surcharges, although some held off raising prices because of customers' growing price sensitivity, resulting in compressed profit margins." Expectations for Fed policy ended the day little changed after some movement on the Powell news. Federal funds futures prices are discounting the chances for a -25 bp rate cut at 3% at the July 29-30 FOMC meeting and 58% at the following meeting on Sep 16-17. EUR/USD (^EURUSD) rose +0.21% due to weakness in the dollar. The euro also received support from the May Eurozone trade surplus report, which showed a surplus of 16.2 billion euros. This was wider than market expectations of 14.0 billion euros and up from April's revised 15.1 billion euros. Swaps are pricing in a 1% chance of a -25 bp rate cut by the ECB at the July 24 policy meeting. USD/JPY (^USDJPY) fell by -0.60% as the Powell's reports led to speculation that some Japanese investors might repatriate capital. The yen also had support from interest rate differentials, as the 10-year JGB yield on Wednesday rose +0.4 bp, while the US 10-year T-note yield fell -3.0 bp. The yen remains under pressure due to concerns about the upcoming upper house election in Japan on July 20. The promises by Japan's ruling Liberal Democratic Party of cash handouts to voters and promises of lower taxes by the opposition have sparked concerns of fiscal deterioration, which are bearish for the yen. August gold (GCQ25) on Wednesday closed up +22.40 (+0.67%), and September silver (SIU25) closed up +0.009 (+0.02%). Bullish factors for gold included the lower dollar and the -3 bp decline in the 10-year T-note yield. Gold also received support from safe-haven demand after President Trump's apparent trial balloon regarding the firing of Fed Chair Powell. On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
8 minutes ago
- Business
Trump told GOP lawmakers he would 'likely' fire Fed chair Powell 'soon,' sources and officials say
President Trump asked a group of Republican lawmakers how they felt about him firing Federal Reserve Chair Jerome Powell and told them he would "likely" fire Powell "soon," according to two White House officials and sources familiar with the Tuesday evening meeting. The Republican lawmakers expressed their approval of Trump's intention to fire him, according to the White House officials and sources on Wednesday. According to one lawmaker in the room, President Trump made it clear he wanted Powell gone and signaled he could move in that direction, but the president was also responding to the reception from other Republicans who were on board with the idea. Trump mentioned this meeting in the Oval Office on Wednesday, saying he discussed the "concept of firing him." "I said, what do you think? Almost every one of them said I should, but I'm more conservative than they are," Trump told reporters. This development follows Trump's ongoing pressure campaign to get Powell to lower interest rates. Powell has said the Fed would have cut rates by now if it weren't for inflation concerns as the result of President Trump's tariff policy. While a decision on Powell could come at any time or not come at all, sources caution that a decision is not final until President Trump makes an announcement publicly. Trump on Wednesday dismissed reports that he drafted a letter to fire Powell. "Are you completely ruling out the idea of firing Jerome Powell?" a reporter asked Trump in the Oval Office. "I don't rule out anything, but I think it's highly unlikely unless he has to leave for fraud," Trump said. Trump allies and top White House officials have been raising questions about the $2.5 billion dollar renovation of two historic Fed buildings on the National Mall, with some suggesting it could be weaponized against Powell to remove him from his role. "We're very concerned. He's doing a little renovation for 2.5 billion of the Fed building -- building a -- a renovation, and they have a close to $900 million cost overrun. And it's a shame, but the biggest cost overrun is the cost overrun for interest rates," Trump said. ABC News White House Correspondent Karen Travers asked Trump if he's calling for an investigation into Powell. Powell has requested a review of the Federal Reserve's renovation project by the agency's inspector general. While many legal scholars argue that Trump does not have the authority to fire Powell, the Director of the National Economic Council Kevin Hassett told Jon Karl on "This Week" on Sunday that he believes Trump can fire Powell if "there's cause." On Capitol Hill, Sen. Thom Tillis, a North Carolina Republican, took to the Senate floor Wednesday afternoon to issue a stark warning against removing Powell. "The consequence of firing a Fed chair just because political people don't agree with that economic decision will be to undermine the credibility of the United States government going forward," Tillis said. "And I would argue, if it happens, you're going to see a pretty immediate response. We've got to avoid that."
20 minutes ago
- Business
Trump says he's 'highly unlikely' to fire Fed's Powell after floating that idea in private
WASHINGTON -- President Donald Trump said Wednesday that he was 'highly unlikely' to fire Federal Reserve Chair Jerome Powell, a public statement made less than 24 hours after suggesting in a private meeting that he was leaning in favor of dismissing the head of the nation's central bank. Trump confirmed that in a White House meeting Tuesday night with about a dozen House Republicans he had discussed the 'concept' of dismissing Powell, long a target because of his refusal to lower interest rates as Trump wants. 'Almost every one of them said I should,' Trump said about the lawmakers who had come to talk to him about crypto legislation. He indicated he was leaning in that direction, according to a White House official. During that session, Trump waved a letter about firing Powell, but a person familiar with the matter said it was essentially a prop drafted by someone else and that the Republican president has not drafted such a letter. Neither source was authorized to publicly discuss the private meeting and they spoke only on condition on anonymity. Trump made his comment about being 'highly unlikely' to dismiss Powell — 'unless he has to leave for fraud' — during an Oval Office meeting with Salman bin Hamad Al Khalifa, the crown prince of Bahrain. In recent days, White House and administration officials have accused Powell of mismanaging a $2.5 billion renovation project at the Fed, adding to months of efforts by Trump try to rid himself of the politically independent central banker. U.S. stocks were shaky as Trump spoke about Powell on Wednesday. The S&P 500's modest gain in the morning became a drop of 0.7% after initial reports that the president may fire the Fed chair. Stocks then trimmed their losses after Trump's later comment. Treasury yields also swiveled in the bond market but remained mostly calm. Those at the White House meeting were among the more far-right lawmakers, including members of the House Freedom Cause whose views are not always shared by other Republicans. In the Senate, Republicans have taken a more guarded approach. Some have backed Powell's performance at the Fed as they await an inspector general's review of the construction project. In a speech Wednesday, Sen. Thom Tillis, R-N.C., said if Powell is dismissed, 'you are going to see a pretty immediate response' 'If anybody thinks it would be a good idea for the Fed to become another agency in the government subject to the president, they're making a huge mistake," said Tillis, who has announced that he is not running for reelection. Sen. John Kennedy, R-La., said this week that Powell 'has done a decent job.' "I don't think he's been perfect,' he said, adding that there have been times they disagreed, but 'I do believe that the chairman is calling them like he sees them.' Republicans on the House Financial Services Committee had been scheduled to meet with Powell on Wednesday evening in a gathering set months ago, but it was abruptly canceled due to votes in the House, according to a committee aide granted anonymity to discuss a private meeting.
Yahoo
40 minutes ago
- Business
- Yahoo
Trump says 'not planning' fire Fed Chair Powell after reports suggest Powell ouster coming 'soon'
President Trump on Wednesday tempered reports from earlier in the day that suggested he planned to fire Federal Reserve Chair Jerome Powell imminently, the latest twist in the ongoing saga regarding Trump's displeasure with the central bank head. Speaking to reporters in the Oval Office late Wednesday morning, Trump said he is "not planning" to fire Powell, though he reiterated his view that rates should be lower and the Fed chair is doing a "terrible job." "I don't rule out anything, but I think it's highly unlikely, unless he has to leave for fraud," he added when asked about a firing. Trump's comments came just about an hour after a slew of reports suggested the president was inching closer to firing Powell. Bloomberg reported that the president was likely to remove Powell "soon," quoting a White House official. CBS News reported that Trump indicated to lawmakers he would do so while polling House GOP members Tuesday night about whether he should go through with it. The New York Times reported that Trump even showed those lawmakers a draft of a Powell firing letter in the Oval Office on Tuesday night. But Bloomberg and the New York Times also noted in their reports that Trump has not made a final decision. Following Trump's comments on Wednesday, markets erased some of the losses suffered after the initial reports Trump would fire Powell in short order. Trump also said Wednesday he had not drafted a letter regarding Powell's firing, but he did acknowledge floating the idea of removing Powell with GOP lawmakers Tuesday night. "I talked to them about the concept of firing him," Trump said. "I said, 'What do you think?' Almost all of them said I should. But I'm more conservative than they are." Trump's new comments came less than 24 hours after he told reporters that Powell's handling of a $2.5 billion renovation of the Federal Reserve headquarters "sort of is" a fireable offense. On Wednesday, he added, "I mean it's possible there's fraud involved with the $2.5 billion renovation." Any final move by the president to oust the Fed chair could lead to a legal war with Powell, who has argued that he cannot be removed by law. In his latest comments, Trump also appeared to narrow his choices to replace Powell. Treasury Secretary Scott Bessent is an "option" but not the top choice, "because I like the job he is doing," Trump said. The Washington Post and Bloomberg reported this week that National Economic Council Director Kevin Hassett is rising as an early front-runner in the race to replace Powell, although former Fed governor Kevin Warsh is also under consideration. Fed governor Christopher Waller is another possibility. Trump on Wednesday acknowledged he was considering Hassett. Bessent, though, is "probably not that much of an option," Trump said Tuesday, citing what he views as Bessent's good performance as Treasury secretary. "He's a very soothing force." Trump has been hammering Powell for months over what Trump viewed as a refusal to ease monetary policy for political and personal reasons, referring to Powell publicly as "dumb," a "numbskull," a "stubborn mule," "stupid," a "moron," and a "fool." Trump nominated Powell for the Fed chair seat during his first administration. His current term is scheduled to run until May 2026. Read more: How much control does the president have over the Fed and interest rates? Trump's allies in recent weeks have used another tactic to turn up the pressure on Powell: They have invoked a $2.5 billion renovation of the Fed's headquarters as a way to question the chair's management of the institution and whether he told Congress the truth about the project during testimony in June. Trump said Tuesday that "the one thing I wouldn't have guessed is he would be spending two and a half million dollars to build a little extension onto the Fed." When asked if it was a fireable offense, Trump said, "I think it sort of is, because if you look at his testimony ... he's not talking about the problem. It's a big problem." One House Republican, Florida Rep. Anna Paulina Luna, posted on X Tuesday night: "Hearing Jerome Powell is getting fired! From a very serious source," and later added, "I'm 99% sure firing is imminent." CBS also reported that some members of the House Committee on Financial Services, which acts as oversight for the Fed, were planning to meet with Powell on Wednesday night and that some want to reinforce his independence. Semafor later reported that the meeting had been canceled. Top administration officials have sent mixed signals about how far Trump would go with Powell. Hassett said Sunday on ABC News's "This Week" that whether the president has the legal authority to fire Powell before his term is up next May "is being looked into" and that "certainly, if there's cause, he does." But Treasury Secretary Scott Bessent told Bloomberg Tuesday that the president "said numerous times he's not going to fire Jay Powell" and compared Trump's public pressure to former college basketball coach Bobby Knight "working the refs." "President Trump seems to prefer the Bobby Knight school," he said. Bessent also said Tuesday that "there's a formal process that's already starting" to find Powell's replacement. He also hopes Powell decides to leave the Fed board when his term as chair is up. His seat on the Fed Board of Governors is not up until 2028. Trump has also sent mixed signals in recent months about whether he would seek to remove Powell, musing about it publicly before assuring he wouldn't do it. Wall Street is paying close attention to the drama unfolding in Washington, D.C. JPMorgan Chase (JPM) CEO Jamie Dimon said Tuesday that the independence of the Federal Reserve is "absolutely critical" and warned that "playing around with the Fed can often have adverse consequences." Goldman Sachs (GS) CEO David Solomon told CNBC Wednesday that "I think central bank independence, Fed independence, is very important and it's something we should fight to preserve." A firing by Trump could potentially open a new legal war with Powell, who has argued that his removal is "not permitted by law." The only language in law pertaining specifically to the removal of Fed board members can be found in Section 10 of the Federal Reserve Act. The law states that each member of the board shall hold office for 14 years "unless sooner removed for cause by the President." The statute doesn't have any language that specifically addresses the chair of the Board of Governors, nor does it detail what exactly constitutes "for cause." The term has been interpreted in legal rulings to mean "inefficiency, neglect of duty, or malfeasance." But Powell and the Fed could still have the backing of the Supreme Court, which made it clear in a May decision it might protect the central bank even as it allowed Trump to fire the board members of two other independent agencies: the National Labor Relations Board and the Merit Systems Protection Board. The central bank, the court said, "is a uniquely structured, quasi-private entity that follows in the distinct historical tradition of the First and Second Banks of the United States." Trump is trying to challenge a 90-year-old Supreme Court precedent limiting the president's power to dismiss independent agency board members except in cases of neglect or malfeasance. If that precedent eventually falls, a Powell firing may be easier to legally justify at the Fed. Click here for in-depth analysis of the latest stock market news and events moving stock prices
NDTV
41 minutes ago
- Business
- NDTV
Trump Says He's 'Highly Unlikely' To Fire Fed's Powell
President Donald Trump said Wednesday that he was "highly unlikely" to fire Jerome Powell, a public statement made less than 24 hours after suggesting in a private meeting that he was leaning in favor of dismissing the head of the nation's central bank. Trump confirmed that in a White House meeting Tuesday night with about a dozen House Republicans he had discussed the "concept" of dismissing Powell, long a target because of his refusal to lower interest rates as Trump wants. "Almost every one of them said I should," Trump said about the lawmakers who had come to talk to him about crypto legislation. He indicated he was leaning in that direction, according to a White House official. During that session, Trump waved a letter about firing Powell, but a person familiar with the matter said it was essentially a prop drafted by someone else and that the Republican president has not drafted such a letter. Neither source was authorized to publicly discuss the private meeting and they spoke only on condition on anonymity. Trump made his comment about being "highly unlikely" to dismiss Powell - "unless he has to leave for fraud" - during an Oval Office meeting with Salman bin Hamad Al Khalifa, the crown prince of Bahrain. In recent days, White House and administration officials have accused Powell of at the Fed, adding to months of efforts by Trump try to rid himself of the politically independent central banker. U.S. stocks were shaky as Trump spoke about Powell on Wednesday. The S&P 500's modest gain in the morning became a drop of 0.7% after initial reports that the president may fire the Fed chair. Stocks then trimmed their losses after Trump's later comment. Treasury yields also swiveled in the bond market but remained mostly calm. Those at the White House meeting were among the more far-right lawmakers, including members of the House Freedom Cause whose views are not always shared by other Republicans. In the Senate, Republicans have taken a more guarded approach. Some have backed Powell's performance at the Fed as they await an inspector general's review of the construction project. In a speech Wednesday, Sen. Thom Tillis, R-N.C., said if Powell is dismissed, "you are going to see a pretty immediate response" "If anybody thinks it would be a good idea for the Fed to become another agency in the government subject to the president, they're making a huge mistake," said Tillis, who has announced that he is not running for reelection. Sen. John Kennedy, R-La., said this week that Powell "has done a decent job." "I don't think he's been perfect," he said, adding that there have been times they disagreed, but "I do believe that the chairman is calling them like he sees them." Republicans on the House Financial Services Committee had been scheduled to meet with Powell on Wednesday evening in a gathering set months ago, but it was abruptly canceled due to votes in the House, according to a committee aide granted anonymity to discuss a private meeting.
