- The EUR/USD jumps over 150 pips to 1.1721 after US President Trump suggests firing Fed Chair Powell.
- CBS reported that Trump asked House Republicans whether Fed Chair Powell should be removed, citing the high cost of the Fed’s headquarters renovation.
- Trump criticizes Powell over a $2 billion renovation of the Fed’s Washington, D.C. headquarters, calling it unnecessary and extravagant.
The Euro (EUR) jumps against the US Dollar (USD) on Wednesday, with EUR/USD surging to 1.1721 after reports emerged that US President Donald Trump asked a group of House Republicans whether he should fire Federal Reserve (Fed) Chair Jerome Powell. The news triggered a sharp sell-off in the Greenback, boosting EUR/USD to its highest level in over a week.
At the time of writing, EUR/USD is trading around 1.1650, having pulled back slightly after hitting an intraday high of 1.1721. The pair rose more than 150 pips following the CBS report, which added a fresh layer of political uncertainty to US monetary policy.
According to CBS News, Trump raised the idea of dismissing Powell during a closed-door meeting with House Republicans on Tuesday, citing excessive renovation costs at the Fed’s headquarters as possible grounds for removal. While it’s unclear if the President can legally fire Powell, the news alone was enough to cause a sharp sell-off in the US Dollar.
On Wednesday, Trump denied that he was planning to attempt to fire Powell, but he left an open door for the Fed’s Chair departure. “I don’t rule out anything, but I think it’s highly unlikely. Unless he has to leave for fraud,” Trump told reporters at the White House, according to The Wall Street Journal.
The US Dollar Index (DXY) dropped from a high of 98.91 to 97.90 after the news broke.
President Trump has repeatedly criticized Jerome Powell for keeping interest rates “too high,” arguing that elevated borrowing costs are hurting American growth and competitiveness. He has long pressured the Fed to adopt a more aggressive easing stance, especially as inflation begins to cool. Trump’s latest remarks intensified that pressure, casting further doubt on the Fed’s ability to maintain its independence. While the central bank continues to signal a cautious, data-driven approach, markets now fear that political interference could influence upcoming policy decisions, particularly with Trump openly calling for Powell’s resignation before his term ends in May 2026.
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