It might seem like a lifetime ago, but there was a point in the mid-2000s when Donald Trump was best known for pointing his finger and saying “You’re fired.”
The president stopped short of using his catchphrase on Jerome Powell Wednesday, but investors still got a sense of what would happen if he did dismiss the Federal Reserve chair.
Stocks and the dollar dropped after a White House official told Barron’s and others that Trump was likely to fire Powell soon, then rebounded when the president backtracked on the idea. Blue-chip indexes ended the day higher, although the dollar wasn’t able to pare back all of its losses.
It is not hard to see why the market wants Powell to keep his job. The White House meddling with monetary policy would raise worrying questions about Fed independence.
And apart from that the president’s push for sharp interest-rate cuts would also likely stop the central bank from bringing inflation down to 2%, at a time when tariffs are already forcing consumers to cope with price pressures.
But investors’ best strategy here is to keep faith in the TACO trade—the idea that “Trump Always Chickens Out” in key negotiations. Polymarket users think there’s an 80% chance Powell remains in place at the end of this year, according to a market run by the event-based trading platform.
That’s because Trump tends to care more about the market and big business than he lets on. Wednesday’s brief selloff would have stung him, and big bank CEOs including JPMorgan Chase’s Jamie Dimon and Goldman Sachs’ David Solomon have also come out fighting for Fed independence as the second-quarter earnings season kicks off.
So while the Trump-Powell drama may be starting to feel like a particularly fractious episode of The Apprentice, it’s probably a safe bet that the Fed chair won’t be dispatched from the “boardroom” anytime soon.
—George Glover
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Trump Won’t Fire Powell, Or Will He?
President Donald Trump escalated the drama about whether he would keep Federal Reserve Chair
Jerome Powell in that role until his term expires or replace him early. The idea of firing Powell was first floated and then publicly knocked down by Trump. It renewed uncertainty about U.S. monetary policy.
- Trump surveyed about a dozen lawmakers about firing Powell Tuesday evening in the Oval Office, something that made its way into news accounts by morning. Asked about it in another Oval Office meeting on Wednesday Trump didn’t rule it out. But he also said it was “highly unlikely” unless for fraud.
- That last idea echoes some administration claims about the Fed’s $2.5 billion headquarters renovation. But Trump is mainly impatient about Powell’s resistance to lowering interest rates, a demand he has made several times. Powell has said he
intends to serve out his term as chair, which ends in May.
- Questions about Powell’s future at the Fed initially roiled stock and bond markets but they snapped back. The Fed has denied allegations about the Fed’s renovation and published additional information about it. Jared Bernstein, former chair of the Council of Economic Advisers, called firing Powell “a recipe for disaster.”
- Two major bank CEOs, JPMorgan Chase’s Jamie Dimon and Goldman Sachs’ David Solomon, have indicated that they don’t support the removal of Powell. Solomon told CNBC Wednesday that central bank independence “has served us very well” in terms of monetary policy.
What’s Next: Despite Trump’s walk-back, some believe the damage may be done. “This was a preview of coming attractions,” said RSM chief economist Joe Brusuelas. Markets now know that firing Powell is a live possibility, and that introduces instability.
—Nicole Goodkind and Anita Hamilton
Crypto Bills Advance to Debate After Marathon House Vote
Three cryptocurrency bills in the House finally passed a procedural hurdle after a marathon nine hour vote late Wednesday in the second attempt to move them to debate. President Trump earlier declared this “Crypto Week,” and expressed optimism for the bills’ passage.
- Bitcoin’s price was wavering around $118,785 late Wednesday after the House passed the procedural vote 217 to 212, after leadership convinced several Republican holdouts to change to yes from no. The House had voted down the procedural measure on Tuesday.
- The procedural vote aimed at advancing three crypto-related bills, but GOP hard-liners wanted assurances the legislation would ban a central bank digital currency. Wednesday’s vote, which was suspended for a time while leadership met with holdouts, is now the longest vote in House history.
- Cryptos have gained appeal under a crypto-friendly second term for Trump. Billionaire venture capitalist and Palantir Technologies co-founder Peter Thiel disclosed a 9% stake in crypto mining provider BitMine Immersion Technologies.
- The three bills the House is considering aim to regulate different aspects of digital assets. The crypto industry is largely supportive of them as it would provide some much-needed regulatory clarity, which is expected to lead to more investments in the sector.
What’s Next: House Speaker Mike Johnson was still hoping to get the bills passed this week. House leadership struck a deal to add a crypto provision to the National Defense Authorization Act, a must-pass bill.
—Janet H. Cho, Liz Moyer, and Elsa
Ohlen
United Airlines Says Conditions Are Looking Less Uncertain
United Airlines’ second-quarter profit beat Wall Street’s expectations, as demand accelerated in July, and business demand accelerated by double digits. The carrier said conditions are “less
uncertain” than they were in April, allowing it to update full-year guidance.
- Second-quarter revenue rose 1.4%, and United reported profit of $3.87 a share. Its updated full-year outlook sets a range of $9 to $11 a share. That’s lower than the stable conditions outlook it gave in April, but above the $7 to $9 it projected
for in a recessionary environment.
- The report comes after Delta Air Lines last week posted better-than-expected quarterly results and restored
its full-year guidance. United saw a six percentage-point acceleration of demand starting in July, after it was hobbled in May by disruptions at its Newark Airport operations hub.
- United’s operating revenue of $15.2 billion increased 1.7% as it continued to see gains in its premium services. United’s premium cabin revenue grew 5.6% from a year ago; cargo revenue rose 3.8% from last year; and loyalty revenue jumped 8.7%.
- CEO Scott Kirby said employees navigated through a volatile macroeconomic environment. After the demand momentum shifted in early July, he expects another inflection in industry supply mid-August. “The world is less uncertain today than it was during the first six months of 2025.”
