Trump Misinterprets Powell’s “Strong Economy” Remark as a Rate Cut Signal?

Source Tradingkey

TradingKey - According to recent reports, Federal Reserve Chair Jerome Powell has made clear that, despite mounting pressure from President Trump and his allies, he has no intention of resigning during his term.

Powell emphasized that stepping down during the sensitive period leading up to an election would undermine the Federal Reserve’s independence.

Lawmakers from both parties have urged Powell to remain in office. Republican Senator Mike Rounds stated that Powell believes his “responsibility is to uphold that independence.”

Congressional advisors have indicated that the possibility of Trump firing Powell has now been ruled out, citing concerns that such a move could trigger significant turmoil in financial markets.

On July 24, Trump visited the Federal Reserve’s headquarters renovation site, where he held a conversation with Powell. Trump later claimed that Powell told him the U.S. economy is “very strong” — and interpreted that comment as an implicit suggestion to cut interest rates.

Trump and Powell

President Trump (left) inspects the Federal Reserve renovation project, accompanied by Fed Chair Jerome Powell (right), source: Reuters

However, the Fed under Powell typically makes rate decisions based on data outcomes. In a strong economic environment, the central bank is theoretically more inclined to keep rates steady — not lower them.

Meanwhile, Trump’s lighthearted tone during the visit helped downplay the ongoing dispute over the Fed’s renovation costs, signaling that the relationship between the two may not be irreparably broken. This could help stabilize market expectations around policy continuity.

Still, persistent calls from Trump for rate cuts continue to inject uncertainty into market expectations regarding the future path of interest rates.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Japanese Yen retreats further from two-week high against USD on softer Tokyo CPIThe Japanese Yen (JPY) drifts lower for the second straight day against its American counterpart and retreats further from a two-week high touched the previous day.
Author  FXStreet
Yesterday 03: 12
The Japanese Yen (JPY) drifts lower for the second straight day against its American counterpart and retreats further from a two-week high touched the previous day.
placeholder
Ethereum Price Forecast: BitMine holdings cross 560K ETH as ETHA hit $10 billion inflows on 1st anniversaryEthereum (ETH) moved toward the $3,780 resistance on Thursday.
Author  FXStreet
Yesterday 03: 14
Ethereum (ETH) moved toward the $3,780 resistance on Thursday.
placeholder
Forex Today: US Dollar shakes off bearish pressure ahead of mid-tier dataThe US Dollar (USD) Index gained more than 0.3% on Thursday and snapped a four-day losing streak.
Author  FXStreet
Yesterday 06: 26
The US Dollar (USD) Index gained more than 0.3% on Thursday and snapped a four-day losing streak.
placeholder
Crypto market bulls bleed over $1B this week as record high US M2 supply, Trump’s rate cut pushThe total cryptocurrency market capitalization trades in the red by nearly 3% so far this week as bullish momentum fades.
Author  FXStreet
Yesterday 07: 22
The total cryptocurrency market capitalization trades in the red by nearly 3% so far this week as bullish momentum fades.
placeholder
Bitcoin Price Bleeds As Galaxy Digital Unleashes $1.5 Billion Sell-OffBitcoin slipped from an intraday peak above $119,000 late Thursday to trade as low as $115,800 in European morning hours.
Author  NewsBTC
23 hours ago
Bitcoin slipped from an intraday peak above $119,000 late Thursday to trade as low as $115,800 in European morning hours.
goTop
quote