Yesterday, US President Donald Trump stated that he could dismiss Federal Reserve Chairman Jerome Powell, casting doubt on the idea of central bank independence. He also expressed frustration that policymakers had not lowered interest rates in recent months.

"If I want him out, he'll be out of there real fast, believe me," Trump told reporters in the Oval Office on Thursday when asked about an earlier social media post in which he criticized the Fed Chair for not cutting rates fast enough. "I'm not happy with him." In a previous post, Trump had written that firing Powell might happen fairly quickly! The Federal Reserve declined to comment on such remarks.

Trump did not answer a reporter's question about whether he is trying to remove the head of the central bank. He also called Powell, whom he appointed during his first term, "terrible." "We have essentially no inflation," Trump said. Trump remarked that most prices, including crude oil and gasoline, had declined, implying that interest rates were an exception. He went on to suggest that the Federal Reserve chairman was engaging in political maneuvering and influencing the economy, contrasting this with the European Central Bank's recent decisions to cut rates.

Markets, however, barely reacted to Trump's comments about Powell. Stocks traded mixed amid optimism over potential tariff deals with the European Union and Japan, while U.S. Treasury yields declined. On the currency market, the dollar lost ground even against the euro, despite the ECB's widely anticipated rate cut.

Powell's term as Fed Chair ends in May 2026. Trump's comments came the day after Powell spoke in Chicago, reiterating that the Fed would not rush into rate cuts and instead awaits more economic clarity.

Senator Elizabeth Warren commented on Thursday that "the president has free speech just like everyone else, but he does not have the power to fire Jerome Powell. And if he tries, he will crash the markets." "Even countries with dictators try to create a central bank that is independent of the president of the country in order to attract capital," she added.

Legally, the question of whether a president can fire high-ranking officials considered independent from the White House has recently come under scrutiny after the administration removed top officials from the FTC and the National Labor Relations Board.

Experts say such removals directly challenge a 1935 Supreme Court decision that paved the way for agency independence. Powell, speaking on Wednesday, referenced a current Supreme Court case concerning the dismissal of NLRB and MSPB officials. "There's a Supreme Court case people will have read probably in today's Journal," Powell said during a Q&A at the Economic Club of Chicago.

Trump's latest criticism of the Fed echoes his attacks during his first term, when he repeatedly lashed out at Powell and his colleagues for not easing policy quickly or decisively enough for his liking. However, Powell was never removed.

Trump's recent move to hike tariffs globally has raised concerns about slowing domestic growth and rising prices, further complicating the Fed's policy stance. In his Wednesday speech, Powell reiterated that the Fed must ensure import tariffs do not result in a persistent rise in inflation.

EUR/USD Technical Outlook

Currently, buyers need to reclaim the 1.1405 level to target a test of 1.1467. From there, the path to 1.1525 becomes viable, although reaching this without major institutional support could be challenging. The ultimate target stands at 1.1545. In case of a drop, significant buying interest is expected around 1.1340. If support fails there, it would be wise to wait for a new low at 1.1260 or consider long positions from 1.1165.

GBP/USD Technical Outlook

Buyers need to capture the nearest resistance at 1.3290 to aim for 1.3330—breaking above which may prove difficult. The furthest upside target is the 1.3380 area. In the event of a decline, bears will attempt to regain control at 1.3240. A successful break below this level would deal a blow to the bulls and push GBP/USD toward 1.3200, with a further move toward 1.3165.