Trump denies that he plans to fire Powell: ‘Highly unlikely’

Economic

Summary:

Trump denied plans to fire Fed Chair Jerome Powell, calling it "highly unlikely," despite reports he discussed it with GOP lawmakers and even drafted a termination letter amid ongoing criticism.

Hours after President Donald Trump told a room full of Republican lawmakers that he will fire Federal Reserve Chair Jerome Powell, he denied plans to do that.

“We’re not planning on doing it,” he said. “It’s highly unlikely.”

Trump on Tuesday met with Republican lawmakers and asked them if they thought he would fire Powell. After receiving support, the president said he would follow through, according to a senior White House official.

“The President asked lawmakers how they felt about firing the Fed Chair. They expressed approval for firing him. The President indicated he likely will soon,” said the official, who spoke on the condition of anonymity to speak candidly on the issue.

Separately, the New York Times reported that Trump has gone so far as to draft a letter for firing Powell and showed it to lawmakers during that meeting.

A Fed official declined comment to CNBC on the report about the Trump meeting Tuesday, which came after Republicans blocked a procedural vote on crypto legislation that the president favors.

Trump and other White House figures have launched a multi-pronged attack on Powell to push the central bank to lower its key borrowing rate. Most recently, they have blasted Powell over renovations to the Fed’s Washington headquarters, raising suspicion that Trump could try to remove the Fed leader for cause.

A recent Supreme Court decision indicated that the president does not have the authority to remove Fed officials at will.

In a CNBC interview Wednesday, Rep. French Hill, the chair of the House Financial Services Committee, repeated that “I don’t see” Trump firing Powell. Treasury Secretary Scott Bessent also told Bloomberg News on Tuesday that he didn’t expect Trump to move in that direction.

However, Rep. Anna Paulina Luna, a Florida Republican who on Tuesday joined with other party members in blocking the crypto initiative, said on social media site X that a move against Powell is forthcoming.

“Hearing Jerome Powell is getting fired! From a very serious source,” she said, later adding, “I’m 99% sure firing is imminent.”

In prior statements on the matter, Powell has said his firing is “not permitted under the law.” No president ever has attempted to so in the past, though others have criticized the central bank leader.

Trump nominated Powell for the chair in November 2018 to succeed Janet Yellen, who went on to become Treasury secretary under former President Joe Biden after holding the Fed position for four years. The Senate confirmed Powell the following February, but has been the subject of frequent criticism from Trump both during the president’s first term and the second.

Source: cnbc

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Adam

Commodity

Gold and silver prices are up a bit in early U.S. trading Tuesday. At mid-week it’s a lackluster marketplace, which is not surprising for mid-summer. August gold was last up $9.40 at $3,346.10. September silver prices were last up $0.165 at $38.275.

Asian and European stocks were mixed overnight. U.S. stock indexes are pointed to mixed openings today in New York, amid quieter summertime trading.

The key outside markets today see the U.S. dollar index slightly down. Nymex crude oil futures prices are weaker and trading around $66.00 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.477%.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, the producer price index report, industrial production and capacity utilization, the Federal Reserve’s beige book and the weekly DOE liquid energy stocks report.

Mild price gains for gold, silver in quieter summertime trading_1

Technically, August gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the June low of $3,250.50. First resistance is seen at $3,375.00 and then at this week’s high of $3,389.30. First support is seen at this week’s low of $3,327.30 and then at $3,300.00. Wyckoff's Market Rating: 7.0

Mild price gains for gold, silver in quieter summertime trading_2

September silver futures bulls have the solid overall near-term technical advantage. Prices are in an uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $40.00. The next downside price objective for the bears is closing prices below solid support at $36.00. First resistance is seen at Tuesday’s high of $38.74 and then at $39.00. Next support is seen at Tuesday’s low of $37.895 and then at $37.50. Wyckoff's Market Rating: 7.5

Source:kitco

Risk Warnings and Disclaimers

Add to Favorites

Thomas

Central Bank

Economic

Short-maturity US Treasuries jumped and the dollar plunged after a White House official said President Donald Trump is likely to fire the chief of the Federal Reserve soon.

Yields on two-year notes, which are most sensitive to changes in Fed monetary policy, fell seven basis points to about 3.87% as traders bet that Trump would choose a more dovish successor to Chair Jerome Powell. Powell has signaled the need to monitor the impact of Trump’s tariffs on the economy before lowering interest rates further.

“US rates appear to be coming lower no matter what, the US curve will steepen and the dollar will continue weakening, especially vs those with central banks that will not follow the Fed,” said Alvaro Vivanco, head of strategy at TJM FX.

The yield gap between 5- and 30-year Treasuries rose to the highest since 2021 on the news. Meanwhile, the Bloomberg Dollar Spot Index sold off, falling the most since late June on an intraday basis. All G-10 currencies advanced, led by the yen, which rose more than 1% at one point before paring gains.

In Treasuries, the steepening move extended as traders priced in a greater chance that the Fed will cut rates as soon as September.

Source: Bloomberg Europe

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

James Whitman

Forex

Technical Analysis

GBPUSD technicals

The GBPUSD is joining the dollar selling also the news that Trump is set to fire Fed chair Powell. The low price for the day reached into a swing area between 1.33607 and 1.33784.

The news has helped to push the price up sharply higher and up toward the 50% midpoint of the move higher from the May 2024 low to the high price reached on July 1, and the 100 hour moving average. Both those levels come near 1.3464. Move and stay above those levels would open the door for further upside momentum.

The New York Times is now reporting that Trump has drafted a letter to chair Powell. He apparently showed the letter to around a dozen GOP members in the White House late yesterday.

The yield curve is steepening with the 2-year yield down -8.6 basis point at 3872%. The 30-year yield is back above 5% at 5.055% up 4.0 basis points.

US stocks are not taking the news that well – at least initially. The NASDAQ index is down -89 points or -0.44%. The S&P index is down -26 points or -0.41%.

Source: ForexLive

Risk Warnings and Disclaimers

Add to Favorites

Adam

Commodity

After more than a month of sideways movement, silver looks ready to resume its upward trend. The next step for bulls is to break above the $39 per ounce mark, setting a new high for this bull market. Even though silver is already up around 30% this year, there is still room for more gains.

Yesterday’s stronger-than-expected US inflation data gave the US Dollar a boost, which caused some pullback in silver prices. But the bigger drivers—like ongoing worries about the tariff war—are likely to keep the uptrend intact. For now, buyers are aiming to push prices past the $40 level.

Can Silver Still Catch Up to Its Record Highs?

Unlike gold, which keeps setting new highs in dollar terms, silver still has a long way to go to reach similar levels in this bull market. So the key question is—can silver catch up in the next few months?

That would be a tough climb and would depend on two major developments:

A Dovish Fed: The Federal Reserve would need to cut interest rates more aggressively, weakening the US dollar. This usually helps precious metals like silver. But for this to happen, there would likely need to be a deep recession and a sharp drop in US employment.

Tariffs on Silver: The US-Mexico trade conflict would have to escalate and start including silver in the list of taxed goods. Right now, silver is not affected, but with President Donald Trump’s unpredictable policies, investors cannot rule out a change. Since Mexico is the world’s largest silver producer, new tariffs could be a strong trigger for price increases.

Inflation Surprise Clouds Rate Cut Hopes

Yesterday’s US inflation data gave mixed signals. While the monthly core reading came in below expectations, the annual core CPI rose 2.7%—slightly above forecasts. This surprise was enough to strengthen the US dollar.

These readings do not give the Fed any reason to shift its current stance. This means the most hawkish scenario—no interest rate cuts this year—remains a real possibility. In such a policy environment, a sharp rise in silver prices toward historic highs appears very unlikely by year-end.

Silver Technical Analysis

The latest inflation data is now the main driver behind the market rebound, largely due to the strengthening of the US dollar. For silver, the first target for sellers is the area where the upward trend line meets the support level, around $37.50 per ounce.

Silver: Can Tariff Fears Offset US Dollar Pressure and Keep the $40 Target Alive?_1

If the $37.50 support breaks, it could pave the way for a further decline toward the next key support level near $35.50 per ounce, which has been tested multiple times. On the other hand, for buyers, the main target remains the round-number resistance at $40.

source :investing

Risk Warnings and Disclaimers

Add to Favorites

James Whitman

Central Bank

Political

President Trump on Tuesday told reporters that Jerome Powell’s handling of a $2.5 billion renovation of the Federal Reserve headquarters “sort of is” a fireable offense, and reportedly asked some GOP lawmakers Tuesday night if he should remove the central bank chairman.

CBS News reported Wednesday that Trump posed the question during a meeting in the Oval Office with House GOP members; that some lawmakers agreed; and several indicated he will do it.

Trump's latest comments and the new CBS report raise new questions about whether the president may in fact seek to oust the Fed chair, a move that would surely lead to a legal war with Powell, who has argued he can't be removed by law.

The president also appeared in his latest comments to narrow his choices to replace Powell. Treasury Secretary Scott Bessent is an "option," but not the top choice, “because I like the job he is doing,” he said.

The Washington Post and Bloomberg reported this week that National Economic Council Director Kevin Hassett is rising as an early front-runner in the race to replace Powell, although former Fed governor Kevin Warsh is also under consideration. Fed governor Christopher Waller is another possibility.

Bessent, though, is “probably not that much of an option," Trump said Tuesday, citing what he views as his good performance as Treasury secretary.

Trump has been hammering Powell for months over what Trump viewed as a refusal to ease monetary policy for political and personal reasons, referring to Powell publicly as “dumb,” a numbskull,” a “stubborn mule,” “stupid,” a “moron,” and a “fool.”

Trump nominated Powell for the Fed chair seat during his first administration, and his current term is scheduled to run until May of 2026.

Trump’s allies in recent weeks have used another tactic to turn up the pressure on Powell: They have invoked a $2.5 billion renovation of the Fed’s headquarters as a way to question the chair’s management of the institution and whether he told Congress the truth about the project during testimony in June.

Trump said Tuesday that "the one thing I wouldn't have guessed is he would be spending two and a half million dollars to build a little extension onto the Fed."

When asked if it was a fireable offense, Trump said, "I think it sort of is, because if you look at his testimony ... he's not talking about the problem. It's a big problem."

Source: Yahoo Finance

Risk Warnings and Disclaimers

Add to Favorites

Adam

Economic

The big story

There’s a murmur of excitement in China’s venture capital circles these days: foreign investors are starting to return with U.S. dollars.

It’s a result of DeepSeek’s AI disruption, coupled with a buoyant Hong Kong IPO market on track to surpass Wall Street this year as the world’s largest by money raised. Beijing’s signals to support businesses in recent months have also helped.

The Hang Seng Index’s surge of over 20% so far this year reflects near-term optimism. Another sign comes from word of Chinese venture capital firms raising U.S. dollar-denominated funds again, after a dry spell in which the VCs had to turn to local investors with Chinese yuan funds.

Beijing-based BAI Capital said it started raising for a new $800 million fund in February and plans to close the initial round in September. The firm is supported by German global media conglomerate Bertelsmann Group.

BAI said it’s seen “strong interest” for the U.S. dollar-denominated fund, which it will then use to invest in China-based companies. To date, the firm has already invested in 10 companies that plan to go public in the next one to two years.

Future Capital Discovery Fund, an early backer of high-flying electric car startup Li Auto , told me it raised a record $210 million for a U.S. dollar-denominated flagship fund in the second half of last year.

“Once there is a fundraising window, we must quickly seize the opportunity to raise funds,” Mingming Huang, founding partner at Beijing-based Future Capital, said in Chinese, translated by CNBC. “This is very different from the long-standing practice of raising U.S. dollars from the market every few years.”

“Now we need to be very sensitive to macro trends, especially the direction of relations between major economies,” he said. The firm, which counts investors including sovereign wealth funds and endowments from the Middle East, U.S., Europe, Japan and Southeast Asia, has plans to deploy capital for AI agents and hardware.

But it’s been a tough few years for China VCs and their limited partners.

In the VC world, a firm raises money from a range of “limited partners,” which include sovereign wealth funds, pension funds, university endowments and family offices. While getting paid to manage the fund, the VC then chooses startups to back, reaping a reward from the companies’ IPOs that is shared with the limited partners.

The fallout around Chinese ride-hailing company Didi’s New York IPO in June 2021, on the eve of the ruling Chinese Communist Party’s 100th anniversary – despite multiple warnings from Beijing about data privacy breaches – did not sit well with regulators on both sides of the ocean. Didi was backed by a long list of prominent investors across numerous funding rounds, including , and Sequoia Capital.

China would later raise the bar for its companies wanting to list overseas, while Washington ramped up its scrutiny of U.S. capital heading to China, dampening fundraising activity on the mainland, particularly for cross-border investments.

Notably, Sequoia Capital China split off from its U.S. parent in 2023 and rebranded under HSG. It did not respond to a request for comment about their latest U.S. dollar fundraising plans. Other VCs that have spun off or restructured their China arms include GGV Capital, which became Granite Asia, and California-based Matrix, which rebranded its Chinese operations as MPCi last year.

An eye on ByteDance

Not everything is the same as it was in the pre-Didi IPO years.

Rather than giving money to a venture capital firm, many limited partners based in Europe, the Middle East and Asia prefer to directly buy ownership stakes in private companies such as Chinese internet giants ByteDance and Xiaohongshu, said Hope Xu, a venture capitalist. She left Source Code Capital last year to start her own firm, called Density 590, focusing on such deals, known as secondaries, which include single-asset sales and stakes in funds.

Even though the Beijing-based TikTok parent isn’t publicly listed, the demand for its shares is so high that they are essentially as easy to liquidate, or sell, as they would be on a publicly listed exchange, she said. While the sellers tend to mostly come from the U.S. and Asia, Xu said the buyers typically come from the EU, the Middle East or Asia.

It’s a big opportunity for returns.

ByteDance’s valuation has surged from $245 billion at the start of this year to $340 billion, she said Tuesday, noting that investors are starting to accept the uncertainty of the U.S.-TikTok divestiture.

ByteDance declined to comment on its valuation.

The company has become a quiet force in China’s internet realm. Besides owning a popular Chinese TikTok equivalent called Douyin — which surpassed JD.com last year to become the second-largest ecommerce platform by gross sales — ByteDance has also developed a popular AI chatbot called Doubao, along with an AI agent platform named Coze.

Xu pointed out that for tech investments such as AI and robotics, the resources and capital needed are vast, making it difficult for smaller startups. Buying a stake in a big company, such as ByteDance, with its diverse product lines, is essentially like buying an AI exchange-traded fund, she said.

For example, Tencent is not only developing its own AI models and applications, but also investing in AI startups. It reported a nearly five-fold surge in profits from its business associates and joint ventures last year, rising from 5.8 billion yuan to 25.2 billion yuan over 12 months, according to the company’s annual report.

Global ambitions

The China VC world is also no longer just focused on the domestic market.

Citing the macroeconomic environment and tech trends, BAI Capital said its investments will be split between local and overseas startups. Half of its funds will go towards China-based companies looking to expand worldwide in fintech, entertainment, AI and supply chains, while the other half of its funds will focus on consumer, healthcare and technology opportunities in China, BAI said.

Since 2019, BAI said it has invested in multiple rounds in Stori, a digital bank in Mexico with 3.6 million credit card users and 2.4 million depositors. “We believe Stori’s success is not an isolated case.”

The question is how long these VCs and their limited partners can remain enthused. The Hong Kong Stock Exchange last week proudly announced its busiest day for IPOs and ETF launches to date: with six gongs on stage.

Top TV picks on CNBC

James Peng, CEO of autonomous driving company Pony AI, talks about Uber founder Travis Kalanick’s possible interest in acquiring the company’s US operations.

Louise Loo, head of Asia economics at Oxford Economics says that while China’s economic growth is likely to slow in the second half of 2025 due to the ‘spectacular growth engine’ of exports ceasing to provide the same impetus, there is a silver lining in the fact that demand for goods from China’s advanced manufacturing sector are not easily substitutable and would remain relatively resilient despite tariffs headwinds.

Angela Stent, senior fellow at Brookings Institution, says Russian President Vladimir Putin counted on Chinese President Xi Jinping’s support when he invaded Ukraine – and continues to count on Beijing’s economic support and diplomatic support on a global stage.

Need to know

China’s economy locks in a solid first half of the year. But steeper declines in real estate investment and the worst performance in restaurant spending since the pandemic add to growing concerns about whether the economy can hold its current growth pace for the rest of the year.

Nvidia to resume chip exports to China. Citing assurances from the U.S. government, Nvidia

said Tuesday it hopes to resume sales of its H20 GPUs in China. Separately, Alibaba-backed startup Moonshot released its new Kimi K2 AI model late on Friday, which claims to outperform OpenAI’s ChatGPT and Anthropic’s Claude on certain metrics, and has garnered fairly positive feedback for its coding capabilities.

U.S.-China relations remain tense. Wang Yi, China’s most senior diplomat, had a “constructive and pragmatic” meeting with U.S. Secretary of State Marco Rubio on the sidelines of a conference in Malaysia, the U.S. said Friday. China’s readout echoed the tone, including an agreement to explore cooperation while managing differences.

In the markets

Mainland China and Hong Kong stocks are mixed on Wednesday amid mixed trading in the region, as investors assessed U.S. President Donald Trump’s statement of having reached a preliminary trade deal with Indonesia.

Mainland China’s CSI 300 was down 0.35%, while Hong Kong’s Hang Seng Index — which includes major Chinese companies — had gained 0.15% as of 1:12 p.m. local time. The mainland benchmark is up around 1.8% year to date, data from LSEG showed.