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Donald Trump has said he has “no intention” of firing US Federal Reserve chair Jay Powell, after indications that he could sack him sparked a sell-off in markets.

The president has repeatedly hit out against the Fed chair’s refusal to cut interest rates and last week signalled he believed he could dismiss Powell before his term as central bank head comes to an end in May 2026. 

Trump reiterated his complaints that the Fed needed to cut borrowing costs in comments in the Oval Office on Tuesday afternoon, but he added: “I don’t want to talk about that because I have no intention of firing him.”

The remarks came after intense speculation that Powell would soon be dismissed over his refusal to cut borrowing costs.

US stock futures rose, pointing to gains for the benchmark S&P 500 index and tech-heavy Nasdaq 100 later on Wednesday. The dollar index extended a recovery and is up 0.9 per cent since the start of Tuesday, while the Japanese yen dropped by the same amount, with one dollar buying ¥142.10.

In Asia, markets rose on Wednesday morning with Japan’s broad Topix gaining 2 per cent, Hong Kong’s Hang Seng 2.3 per cent and Taiwan’s benchmark 3.6 per cent.

Investors said the president’s apparent U-turn on Powell proved there were at least some members of his inner circle who recognised that markets value the independence of America’s major institutions.

“This shows there are some guardrails around this president,” said Dec Mullarkey, managing director at fund manager SLC Management. “This feels like [Treasury secretary Scott] Bessent’s touch,” he added.

“Clearly other folks have talked to [Trump] and explained that [firing Powell] would have caused huge volatility. Bessent recognises that the integrity of markets has to be maintained.”

Powell has repeatedly said that he would serve his full term as Fed chair and believed that his early dismissal would not be allowed under US law. 

Investors’ concerns over his tenure rose after Kevin Hassett, director of the National Economic Council, said on Friday that Trump would “continue to study” the matter of dismissing Powell.

Hassett, then chair of the Council of Economic Advisers, backed Powell after the Fed chair and Trump fell out during his first term as president.

Financial markets sold off on Monday after Trump attacked Powell as “Mr Too Late” in a post on his Truth Social platform, with the dollar falling to a three-year low against a basket of currencies and the S&P 500 index dropping 2.4 per cent.

US stocks and the dollar largely recouped their losses during regular trading on Tuesday after Bessent said a trade war with China was “unsustainable”.

The Fed has been on a collision course with Trump since shortly after he took office, but the attacks from the White House have intensified ever since the president launched his “reciprocal tariffs” on April 2. 

Rate-setters, including Powell, have made clear that they will postpone any interest rate cuts until they are confident that Trump’s trade policies will not lead to a persistent rise in inflation. 

The Fed chair and his colleagues have also made clear their concerns that Trump’s tariffs raise the prospect of lower growth and higher prices, weakening an economy that officials previously said was in good shape. 

Trump took to Truth Social last Thursday saying Powell’s termination “could not come fast enough” after the Fed chair confirmed the previous day that the central bank would not come to stock markets’ rescue and cut rates to counter fears that the tariffs will drive the US economy into recession.

Additional reporting from George Steer and Peter Wells in New York and Arjun Neil Alim in Hong Kong

As Elon Musk shreds the federal workforce and threatens America’s core safety-net, his buddy in the White House, Donald Trump, has been leading the American economy into a recession with his escalating trade war. Now, Musk and Tesla are feeling the financial burn — and the world’s richest man is lashing out.

During a call with investors Tuesday, Musk blamed “paid” and “very organized” protesters for his electric company’s remarkably weak earnings so far in 2025. “They’re obviously not going to admit that the reason that they’re protesting is because they’re receiving fraudulent money, or that they’re the recipients of wasteful largesse, they’re gonna come up with some other reason, but that is the real reason for the protests,” said the billionaire.

Tesla’s quarterly earnings plummeted by 71 percent compared to last year, the company reported Tuesday, as the electric vehicle company saw a 9 percent decline in revenue year over year. Its total earnings were down from $1.4 billion in the first quarter of last year to $409 million in the first quarter this year, the company stated. Tesla’s income was offset by selling $595 million in zero-emissions tax credits, per its earnings report, which helped the company avoid a loss.

“Uncertainty in the automotive and energy markets continues to increase as rapidly evolving trade policy adversely impacts the global supply chain and cost structure of Tesla and our peers,” Tesla stated in an earnings presentation. “This dynamic, along with changing political sentiment, could have a meaningful impact on demand for our products in the near-term.”

The changing political sentiment, of course, has a lot to do with Musk’s gleeful firing of tens of thousands of federal workers in the name of alleged cost savings made by his so-called Department of Government Efficiency (DOGE), as well as his amplification of white nationalists on X — and the straight-armed salute he made during Trump’s post-inauguration rally. Musk and DOGE have slashed the agency that manages Social Security, as he’s falsely criticized America’s core safety-net program as a “Ponzi scheme.”

Musk, who poured $290 million into efforts to elect Trump and Republicans, has seen Tesla become a political lightning rod, with protestors taking out their frustrations over DOGE on his electric vehicle company. Trump, the man he helped elect, has launched a global economic trade war and refuses to let up on China, which has retaliated against his import taxes of 145 percent, countering with 125 percent. 

During Tuesday’s call, however, Musk continued to avoid taking responsibility for the political nightmare he created for his company. He instead touted DOGE’s “progress in addressing waste and fraud,” and reiterated his commitment to “working together with President Trump and his administration, because if the ship of America goes down, you’ll go down with it, including Tesla and everyone else.”

Musk said that while he will begin scaling back from his work with the White House “probably in May,” he expects to continue working with the Trump administration for the remainder of the president’s term. He added that he will begin spending more time on Tesla affairs starting next month.

Tesla backlash is at an all-time high, whether acted on through bumper stickers and peaceful protests or torched vehicles and vandalized company facilities. As calls for boycotts against Tesla have spread across the globe, sales have plummeted across the board, and the company’s latest product, the stainless steel-paneled Cybertruck, has been a flop.

However, Musk ended his call on an optimistic note despite the public displeasure with his work alongside Trump and plunging Tesla profits. “I continue to believe that Tesla, with excellent execution, will be the most valuable company in the world,” said Musk. “By far.”

“We’re not on the ragged edge of death, not even close,” he added.

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Gold hit a record $3,500 a troy ounce for the first time on Tuesday, as Donald Trump’s sustained attack on US Federal Reserve chair Jay Powell added to fears over the central bank’s independence and the prospects for the world’s largest economy.

In a rush to haven assets, gold climbed as much as 2 per cent to $3,500.10, cementing its position as one of the biggest winners from Trump’s return to the White House. The Japanese yen strengthened to ¥140 per dollar for the first time since September, as the dollar index languished near a three-year low.

In a post on his Truth Social platform on Monday, Trump branded Powell “Mr Too Late” and urged the central bank to lower borrowing costs “NOW”. The wave of criticism comes after Powell warned last week that the administration’s sweeping tariffs would lead to slower growth and higher inflation.

Trump “ratcheting up pressure on Powell to ease monetary policy is raising concerns about Fed independence, which has triggered a flight to haven assets,” said Ewa Manthey, a commodities strategist at ING.

The latest Trump salvo is deepening investors’ concern that the tension between the president and the Fed risks spilling into monetary policy and rattling the $29tn Treasuries market, the bedrock of the global financial system.

“Removing Fed independence would be another blow to the hard won credibility of America’s financial institutions,” said Trevor Greetham, head of multi-asset at Royal London Asset Management.

Trump’s broadside on Monday sent the S&P 500 down 2.4 per cent and the tech-heavy Nasdaq closed 2.6 per cent lower. The Stoxx Europe 600 fell 0.6 per cent in early trading on Tuesday — but futures contracts implied Wall Street would rebound at the open.

The criticism of Powell, whose term ends in May 2026, comes after simultaneous falls in US stocks, bonds and the dollar in recent weeks have led to worries that the volatility unleashed by Trump’s trade war could become a broader rejection of dollar assets.

Analysts at MUFG said the “triple selling of the US dollar, US bonds and US equities highlights that threats to the Fed’s independence are further undermining investor confidence in US assets”.

The dollar reversed earlier losses to trade 0.1 per cent higher against a basket of major currencies on Tuesday, but has fallen more than 9 per cent this year.

In bond markets, Treasuries traded in a narrow range, with the 10-year yield up 0.01 percentage points to 4.42 per cent.

The president has frequently criticised Powell for not lowering interest rates rapidly enough, while the Fed chair has said he would never be influenced by political pressure.

The Fed has kept rates on hold this year after lowering them three times in a row in 2024, including a large half-point move in September. The central bank’s next meeting is in May.

Investors and economists said an attempt by Trump to remove Powell would risk inflicting damage on the US economy.

“Any reduction in the independence of the Fed would add upside risks to an inflation outlook that is already subject to upward pressures from tariffs and somewhat elevated inflation expectations,” said Michael Feroli, chief US economist at JPMorgan Chase.

Gold, which some investors rely on as a hedge against inflation, has surged 33 per cent this year. Investors poured at least $19bn into gold-backed exchange traded funds during the first quarter, according to Standard Chartered.

“Physical gold demand remains robust, particularly in Asia and increasingly in Europe,” said Alexander Zumpfe, a bullion trader at Heraeus. “In Germany, we observed strong buying interest from private investors even over the long Easter weekend.”