Overview

• President Trump has stated he has 'no intention' of firing Federal Reserve Chair Jerome Powell, reversing earlier threats following market declines.
• Trump continues to call for interest rate cuts, but Powell and the Federal Reserve maintain a data-driven approach, citing inflation above 2% and a strong labor market.
• Powell has emphasized the legal independence of the Federal Reserve, noting that board members can only be removed for cause, not policy disagreements.
• Market volatility earlier this week, driven by concerns over potential interference with Fed independence, has subsided after Trump's assurances about Powell's tenure.
• The clash underscores the Federal Reserve's commitment to its dual mandate of price stability and maximum employment, independent of political pressures.