trump considers powell firing: semiconductor stocks face turbulence
washington, Wednesday, 16 July 2025.
President Trump is reportedly weighing the dismissal of Federal Reserve Chair Jerome Powell. This news sent shockwaves through the market, especially impacting semiconductor stocks like Nvidia, ASML, and TSMC. One White House official said Trump “likely will soon” fire Powell. Trump, however, denies it. This potential move comes amid Trump’s dissatisfaction with the Fed’s interest rate policies and accusations of excessive spending on the Fed headquarters renovation. One source indicated that Trump showed a draft letter to fire Powell to House Republicans. The markets reacted strongly to the news.
Market volatility and semiconductor performance
The market responded to the uncertainty surrounding Powell’s position. The US dollar index initially dropped as much as 0.8% [7]. The VanEck Semiconductor ETF, which was on track for a seven-week winning streak, fell by 0.6% this week [3]. ASML shares experienced a significant drop, decreasing by roughly 9.5% on Wednesday, contributing to a week-to-date loss of approximately 7% [3]. This volatility reflects investor concerns about potential shifts in monetary policy and the broader economic outlook [GPT].
Trump’s perspective and motivations
Trump has publicly expressed his discontent with Powell’s performance and the Fed’s interest rate decisions [2][5]. Trump has stated he believes Powell is doing a terrible job and that it’s “like talking to a chair” when he speaks with him [2][8]. Trump also criticized the $2.5 billion renovation of the Federal Reserve headquarters, suggesting possible fraud [2][4]. Trump wants the Fed to cut interest rates by up to 3 percentage points [4]. These factors seemingly contribute to his consideration of removing Powell from his position [1].
Expert opinions and potential consequences
Market analysts are wary of the potential ramifications of firing Powell. Greg Valliere, chief US policy strategist at AGF Investments, believes that ousting Powell would signal a loss of Fed independence [7]. George Saravelos, global head of FX strategy at Deutsche Bank, called the removal of Powell “one of the largest under-priced event risks” for markets [7]. Saravelos also projected that the dollar could drop 3% to 4% within 24 hours if Powell were fired [7]. Senator John Kennedy warned of a potential stock market and bond market crash if Powell is removed [7].
Conflicting signals and political reactions
Despite reports of Trump’s consideration, the situation remains fluid. Trump himself stated it is “highly unlikely” he would fire Powell [4]. However, a senior White House official indicated that Trump “likely will soon” take action [3]. Rep. Anna Paulina Luna stated she was “99% sure firing is imminent” [2][4]. Conversely, Rep. French Hill stated he doesn’t foresee Trump firing Powell [4]. These conflicting signals contribute to the overall uncertainty and market unease [GPT].