U.S. President Donald Trump sharpened his criticism of Federal Reserve Chairman Jerome Powell on Wednesday during remarks at the NATO summit, reiterating his dissatisfaction with the central bank chief and signaling his intent to appoint a replacement ahead of Powell’s May 2026 term expiration. “I know, within three or four people, who I’m going to pick,” Trump told reporters in The Hague. “He goes out pretty soon fortunately, because I think he’s terrible.” Trump again attacked Powell’s mental fitness, calling him a “very average person mentally,” adding fuel to a long-running feud between the White House and the Fed.
The comments came just a day after Powell testified before the Senate Banking Committee, signaling a cautious approach to monetary policy. He said the central bank was well-positioned to wait and monitor the effects of recent economic developments, including the inflationary impact of Trump’s new tariff regime. “Policy changes continue to evolve, and their effects on the economy remain uncertain,” Powell said. His remarks contrasted with those of some Fed governors who expressed openness to a rate cut in July if inflation data remains soft.
Trump, meanwhile, has repeatedly urged the Fed to aggressively cut rates, advocating for a full percentage-point reduction. He claims such a move could save the federal government billions—or even up to a trillion dollars—in interest costs. Despite his threats to remove Powell in the past, Trump has so far refrained from taking action, likely due to fears of unsettling financial markets. His renewed push for a leadership change at the Fed adds further uncertainty to an already volatile policy environment.
Markets continue to react to overlapping economic and geopolitical developments. The fragile ceasefire between Israel and Iran remains intact, though sporadic rocket fire and conflicting claims of victory have left investors wary. Nonetheless, the absence of major new hostilities has provided some relief. Oil prices, which had plunged earlier in the week, rebounded modestly on Wednesday. Brent crude rose 0.8% to $67.68 a barrel, while West Texas Intermediate (WTI) gained 0.9% to $64.92. These gains came after the contracts pared back some of the 13% losses incurred earlier in the week following U.S. strikes on Iranian nuclear facilities.
Meanwhile, the U.S. dollar remained under pressure, slipping to its lowest level since 2021 against the euro, which rose to $1.1658. However, the greenback strengthened slightly against the Japanese yen and the Swiss franc. Gold prices recovered for a second consecutive day amid continued expectations of interest rate cuts, supported by the declining dollar and safe-haven demand. Yields on U.S. 10-year Treasuries fell by 1 basis point to 4.283%.
Investors now turn their attention to key U.S. economic data due later in the week. Thursday will see the release of the final Q1 GDP print, durable goods orders, pending home sales, and the weekly jobless claims. However, the most closely watched release will be Friday’s Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge. This report is expected to play a pivotal role in shaping expectations for the Fed’s July policy decision and could influence both the dollar and gold’s direction. MJFXM offers expert-led trading courses designed to help beginners and professionals master Forex, crypto, and stock market strategies.
In U.S. political developments, Zohran Mamdani, a 33-year-old democratic socialist and state lawmaker, is poised to win New York City’s Democratic mayoral primary in a major upset over former Governor Andrew Cuomo. The unexpected result adds to an already volatile political and economic week.
As Trump asserts control over both foreign and domestic narratives—from military strategy in the Middle East to interest rates at home—global markets remain caught in the crossfire, bracing for further twists as data and politics collide.