US President Donald Trump says he has “no intention of firing” Jerome Powell after repeatedly criticising the head of the Federal Reserve.
But Trump added that he would like Powell to be “a little more active” when it comes to cutting interest rates.
Speaking in the Oval Office on Tuesday, he also said he is optimistic about improving trade relations with China.
Last week, the president intensified his criticism of the Fed chief, calling him “a major loser”. The comments sparked a selloff of stocks, bonds and the US dollar, but financial markets have since been recovering from those losses.
The latest comments came after the director of the National Economic Council Director Kevin Hassett said on Friday that Trump was looking into whether it would be possible to sack Powell.
The Fed has not cut rates so far this year, after lowering them by a percentage point late last year, a stance Trump has heavily criticised.
Also on Tuesday, the president said he would be “very nice” in negotiations with Beijing and tariffs would fall if there was a deal, but not to “zero”.
Earlier, US Treasury Secretary Scott Bessent reportedly said he expected a de-escalation of the trade war with China, describing the current situation as unsustainable.
After the remarks, major stock markets were higher in Wednesday morning trade.
Japan’s Nikkei 225 index was up about 1.9%, the Hang Seng in Hong Kong climbed by around 2.4%, while mainland China’s Shanghai Composite edged 0.1% higher.
On Tuesday, US stocks made gains, with the S&P 500 ending Tuesday’s session up 2.5% and the Nasdaq rose 2.7%.
US stock futures were trading higher overnight as investors appeared to welcome the latest remarks. Futures markets give an indication of how financial markets will perform when they open for trading.
Investors feared that pressure on Powell to lower interest rates could cause prices to rise at a time when trade tariffs are already seen boosting inflation.
Trade tensions between the world’s biggest economies, as well as US tariffs on other countries around the world, have sparked uncertainty about the global economy. Those concerns triggered turmoil in financial markets in recent weeks.
On Tuesday, the forecast for US economic growth for this year was given the biggest downgrade among advanced economies by the International Monetary Fund (IMF) due to uncertainty caused by tariffs.
The sharp increase in tariffs and uncertainty will lead to a “significant slowdown” in global growth, the Fund predicted.
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