U.S. stocks seesawed Wednesday after President Donald Trump revealed he had “talked about the concept of firing” Federal Reserve Chair Jerome Powell — a comment that injected fresh uncertainty into financial markets.
Wall Street typically welcomes lower interest rates, which a leadership shakeup could potentially bring. But such a move might also undermine the Fed’s independence and its ability to take tough measures to control inflation.
By midday, the S&P 500 had recovered from a sharp drop and was up 0.1%. The Dow Jones Industrial Average gained 94 points (0.2%), while the Nasdaq rose 0.1%, adding to its record high from the previous day.
Markets initially rose on an encouraging inflation report, but dropped quickly after reports emerged that Trump was considering firing Powell, briefly sending the S&P 500 down 0.7%.
Asked later if he intended to dismiss the Fed chair, Trump responded, “I don’t rule out anything, but I think it’s highly unlikely,” helping to stabilize markets. Still, he added that Powell could be removed “if he has to leave for fraud,” while also criticizing an ongoing $2.5 billion renovation at the Fed’s headquarters.
