The markets experienced a decline on Wednesday following hawkish remarks from Powell, who criticized the tariff policy pursued by Trump, warning that it could lead to an economic slowdown and rising prices, a phenomenon known economically as 'stagflation'. Powell clarified in his speech that his primary focus is currently on prices, indicating a shift towards a more hawkish monetary policy than previously expected.

Trump, who nominated Powell to head the Federal Reserve during his first term (then renewed by President Biden for a second four-year term), has expressed his displeasure with Powell since returning to the White House. However, Powell, who will remain in his position until May 2026, has repeatedly confirmed his intention to complete his term, indicating that the president does not have a legal basis to dismiss him.

The Wall Street Journal reported on Thursday that Trump has been secretly discussing for months the possibility of firing Powell, according to informed sources. The report added that former Federal Reserve governor Kevin Warsh is considered a leading candidate to succeed Powell, although Warsh has urged Trump not to take that step.