Trump denies rumors of firing Powell, financial markets gradually stabilize
2025-07-17 02:06:45
U.S. financial markets stabilized late Wednesday after President Donald Trump denied rumors of firing Federal Reserve Chairman Jerome Powell, calming early morning volatility.
Trump said at Joint Base Andrews that "we have no plans to do anything" and rejected the idea of drafting a letter to fire Powell, but he also expressed a preference for "low-rate people" such as National Economic Council Director Kevin Hassett to take the Fed job.
Despite this, sources revealed that Trump is still open to firing Powell and has received "positive feedback" from Republican lawmakers. The CBOE Volatility Index (VIX) retreated from its intraday high, stocks narrowed their losses, and the dollar stabilized.
Trump's repeated statements: market sentiment fluctuates
Trump's statement this afternoon (16:33GMT) eased market tensions after Bloomberg News quoted White House officials as saying that Trump "may very likely" fire Powell soon, causing the Dow Jones Industrial Average to fall in early trading.
After Trump denied the rumors, the market stabilized and the VIX "fear index" fell from 19.32 to 17.38, reflecting that investor sentiment has calmed down.
Investors' views are divided. One investor said: "Trump's denial is just a delaying tactic. The market is still preparing for the Fed's shock." Another believes: "VIX has fallen, the stock market has rebounded, and short-term panic is subsiding."
The U.S. dollar index (DXY) rebounded from an intraday low of 97.7139 to 98.2174, and USD/JPY rose to 147.77 (-0.71%).
Trump's favor for Hassett heightened market concerns about a premature rate cut. Investors believe political pressure could force the Fed to cut rates in September, but some warn that would heighten inflation risks.
Market performance: short-term stabilization, safe-haven assets remain attractive
The VIX retreat reflects the market's initial acceptance of Trump's denial. The 10-year Treasury yield retreated to 4.453%, but investors expect that if the Fed's independence is damaged, the yield may rise further.
Safe-haven assets remained attractive, with spot gold (XAU/USD) rising 0.9% to $3,352.49 and silver (XAG/USD) rising 0.3% to $37.82.
“Geopolitical and tariff risks are keeping gold and silver strong despite Trump’s denials,” the investor said.
“Gold prices were boosted by headlines suggesting Trump was considering firing Powell ... but he later clarified that was unlikely,” said Daniel Ghaly, commodity strategist at TD Securities. “The gold market has been hit repeatedly.”
Israel launched a heavy airstrike on Damascus, damaging the Defense Ministry and striking areas near the presidential palace. The attack heightened geopolitical concerns and supported safe-haven buying of gold.
On trade, Trump last week threatened to impose a 30% tariff on EU imports, and the European Commission prepared possible tariffs on $84.1 billion worth of U.S. goods if trade talks with Washington fail.
“There’s some uncertainty in the market because of the Israeli attack and the U.S. getting tougher on trade tariffs, which is good for gold,” said Jim Wyckoff, senior analyst at Kitco Metals. “I’d expect gold to be between $3,250 and $3,476 in the short term.”
At 02:03 Beijing time, spot gold was quoted at US$3,355.17 per ounce, up 0.92%.
Trump said at Joint Base Andrews that "we have no plans to do anything" and rejected the idea of drafting a letter to fire Powell, but he also expressed a preference for "low-rate people" such as National Economic Council Director Kevin Hassett to take the Fed job.
Despite this, sources revealed that Trump is still open to firing Powell and has received "positive feedback" from Republican lawmakers. The CBOE Volatility Index (VIX) retreated from its intraday high, stocks narrowed their losses, and the dollar stabilized.
Trump's repeated statements: market sentiment fluctuates
Trump's statement this afternoon (16:33GMT) eased market tensions after Bloomberg News quoted White House officials as saying that Trump "may very likely" fire Powell soon, causing the Dow Jones Industrial Average to fall in early trading.
After Trump denied the rumors, the market stabilized and the VIX "fear index" fell from 19.32 to 17.38, reflecting that investor sentiment has calmed down.
Investors' views are divided. One investor said: "Trump's denial is just a delaying tactic. The market is still preparing for the Fed's shock." Another believes: "VIX has fallen, the stock market has rebounded, and short-term panic is subsiding."
The U.S. dollar index (DXY) rebounded from an intraday low of 97.7139 to 98.2174, and USD/JPY rose to 147.77 (-0.71%).
Trump's favor for Hassett heightened market concerns about a premature rate cut. Investors believe political pressure could force the Fed to cut rates in September, but some warn that would heighten inflation risks.
Market performance: short-term stabilization, safe-haven assets remain attractive
The VIX retreat reflects the market's initial acceptance of Trump's denial. The 10-year Treasury yield retreated to 4.453%, but investors expect that if the Fed's independence is damaged, the yield may rise further.
Safe-haven assets remained attractive, with spot gold (XAU/USD) rising 0.9% to $3,352.49 and silver (XAG/USD) rising 0.3% to $37.82.
“Geopolitical and tariff risks are keeping gold and silver strong despite Trump’s denials,” the investor said.
“Gold prices were boosted by headlines suggesting Trump was considering firing Powell ... but he later clarified that was unlikely,” said Daniel Ghaly, commodity strategist at TD Securities. “The gold market has been hit repeatedly.”
Israel launched a heavy airstrike on Damascus, damaging the Defense Ministry and striking areas near the presidential palace. The attack heightened geopolitical concerns and supported safe-haven buying of gold.
On trade, Trump last week threatened to impose a 30% tariff on EU imports, and the European Commission prepared possible tariffs on $84.1 billion worth of U.S. goods if trade talks with Washington fail.
“There’s some uncertainty in the market because of the Israeli attack and the U.S. getting tougher on trade tariffs, which is good for gold,” said Jim Wyckoff, senior analyst at Kitco Metals. “I’d expect gold to be between $3,250 and $3,476 in the short term.”
At 02:03 Beijing time, spot gold was quoted at US$3,355.17 per ounce, up 0.92%.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
