"You're not fired!" That's the message from President Donald Trump to Federal Reserve Chair Jerome Powell, at least for now. After Trump and Powell toured the renovation project at the Fed's headquarters last week, the president reiterated he has no plans to fire Powell. This despite months of criticism and pressure from Trump toward Powell over the Fed's refusal to lower interest rates. Trump has even considered appointing a "shadow" Fed chair to operate behind Powell.
Donald Trump hesitating to fire someone, especially someone he has criticized so heavily, is surprising to many observers. But Richard Rosso, Houston-based financial planner, thinks Trump is actually doing the wise thing. "All you're going to do by firing Powell is create market turmoil and instability," says Rosso. "And that's not what you want after you've built this track record of trying to create certainty for businesses and markets."
"So I don't think it would be very smart to fire Powell now," he continues.
Powell's term ends in less than a year, so Rosso believes Trump is smart to just ride it out with Powell already considered a lame duck. And, Trump will most likely get the interest rate cut eventually anyway. "Probably by the September (Fed) meeting, you might get a rate cut then based on what happens the rest of the summer with inflation," he tells KTRH. "Also with these tariff deals, maybe we put those to bed by then, which would be nice."
"So I think it's smart (Trump) is not going to fire Powell and just create chaos and a firestorm where he doesn't need to right now."
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