President Donald Trump reportedly floated the idea of dismissing Federal Reserve Chair Jerome H. Powell during a meeting with House Republicans this week. According to two individuals briefed on the meeting who spoke with the New York Times, Trump showcased a drafted letter to fire Powell and sought advice from roughly a dozen lawmakers, indicating he was leaning toward action.
The meeting in the Oval Office was initially intended to address concerns over cryptocurrency legislation, but Trump shifted focus to express dissatisfaction with Powell — whom he appointed in 2017 during his first term. Trump’s push for lower interest rates contrasts with Powell’s cautious approach amid inflation concerns.
While Trump appears determined, some within his orbit have reportedly warned him about the significant risks of firing Powell. Such a move could be calamitous and trigger wide-ranging consequences, they have cautioned, highlighting potential financial and political fallout that Trump might not fully anticipate.
Trump’s consideration of Powell’s removal has set off a wave of speculation. Whether he will act on his grievance against the Fed chair remains uncertain, but the possibility has reignited debates about the independence of America’s central bank and the broader implications of political intervention in economic governance.
The U.S. dollar $USDX experienced volatility in response to the news this week, reflecting market unease. While Trump later suggested firing Powell was “highly unlikely,” speculation intensified following an X post by Anna Paulina Luna, a Republican congresswoman from Florida, who wrote on Tuesday night that she was “hearing” that the Fed chair would be fired, and his sacking would be “imminent”.
Meanwhile, criticism of a costly Fed headquarters renovation has fueled tensions further. Wall Street leaders, including JPMorgan Chase’s $JPM CEO, Jamie Dimon, have cautioned against giving Powell his marching orders.
“I think the independence of the Fed is absolutely critical,” Dimon told media members in a call after the bank’s earnings announcement this week.
Powell has a constitutional mandate to stay in his job until 2027 and has declined comment on the reports.
—BBTW editor Peter Green is away, so Cheddar’s VP of Content, Lauren Babbage, is filling in.
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Big Businesses mentioned this week
Wall Street gives banks’ Q2 earnings an ‘A’
It’s Q2 earnings season with Google $GOOGL, Tesla $TSLA , GM $GM and Blackstone $BX all reporting next week. This week, we got a crucial look into the health of the financial sector and broader economy this week as a host of big banks reported their earnings. So far, most banks have beaten expectations. Contrary to what most people might feel when looking at their rising credit card balances, banks say consumers have been resilient.
Bank stocks have outpaced gains in the broad market since the president announced tariffs in April. Markets responded well to their earnings reports this week, too. But they’re still holding their collective breath over trade uncertainties and other geopolitical concerns. Here’s a breakdown of how they fared:
- JPMorgan Chase beat profit estimates, raised its 2025 net interest income outlook, increased its investment banking fees 7% to $2.5 billion, and saw credit card spending up 7% on last year. “The U.S. economy remained resilient. The finalization of tax reform and potential deregulation are positive for the economic outlook,” said Jamie Dimon, CEO of JPMorgan Chase.
- Wells Fargo beat profit estimates, lowered its 2025 net interest income outlook, and increased its nvestment banking fees 9% to $696 million.“The big news during the quarter was having the asset cap removed. The lifting of the asset cap marks a pivotal milestone in our transformation along with the termination of 13 orders since 2019 including seven this year alone. We are a far stronger company today because of the work we’ve done,” said Charlie Sharf, CEO.
- Citigroup beat profit estimates, maintained revenue guidance. “The actions we’ve taken have set up Citi to succeed long term, drive returns above that level and continue to create value for shareholders,” said Jane Fraser, CEO.
- Bank of America beat earnings estimates but fell short on revenue estimates, still, increased net operating income by 7%.“We’re also benefiting right now from repositioning - a lot of geopolitical uncertainty, a lot of rate changes, elections last year leading to new policies this year, supply chain changes. All of those things are times where corporates and investors think about their portfolio, think about whether or not they want to reposition,” said Alastair Borthwick, CFO.
The Usual Suspects
- Meta’s “Supercluster”: Mark Zuckerberg announced Monday Meta $META will invest hundreds of billions of dollars into artificial intelligence computer infrastructure. Meta aims to be the first company to bring online a “1-gigawatt-plus supercluster.” For context, 1 gigawatt is roughly enough to power 876,000 U.S. homes annually, so Meta is contemplating powering about a third of New York City’s homes.
- The race for the biggest “supercluster”: Google $GOOGL also announced the company will invest $25 billion in data center and AI infrastructure over the next two years. This infrastructure will be within the PJM Interconnection grid region, the biggest power grid in the U.S. This particular grid has struggled to keep up with demand from newly constructed data centers and the use of AI. These announcements come ahead of President Trump’s planned declaration of a $70 billion overall in AI and energy investments.
- Inflation is up a tad: Inflation rose by 2.7% in June compared to last year, which was in line with expert predictions but still higher than the Federal Reserve’s 2% target. Items you’re still paying major bucks for? Energy, food, car insurance, hospital services/prescription drugs. Items that are decreasing in price? Cars, airline tickets, hotels, dairy products and eggs.
- If we say “tariffs” three times, can we all go home? The E.U. is annoyed with the U.S. On Monday, it accused President Trump of hampering efforts to come to a mutually agreed upon deal by the August 1 deadline. The U.S. has threatened a 30% tariff on European goods. In response, Trump said he’s willing to make a deal. So, it’s all a bit “TBD,” this one.
- Russia sanctions threatened: The U.S. also threatened to add sanctions to anyone who buys oil from Russia, if Russia does not strike a peace deal with Ukraine in 50 days. Again, “TBD.”
- We’ve heard this one somewhere before: Mexico responded to tariffs threatened on the country last weekend – 30% on all goods – saying the U.S. isn’t doing its part in stopping the war on fentanyl. Trump also used Mexico’s alleged failure to control fentanly flow across the border as justification for his tariffs against the country in February. No, you hang up. No, you.
- Tesla’s global expansion: Tesla’s Y Model has arrived in India, but not without some price pushback. The only model on display currently in the new Mumbai showroom costs $70,000. Customers can place orders now, but deliveries won’t begin until September. In the meantime, Tesla will be installing its next-gen V4 Superchargers across the region, according to the Times of India.
- Never doubt a super hero: Unless maybe it’s a Marvel $DIS super hero over the past 2 years. I can say this because I am a huge Marvel fan, and sadly, the company’s recovery is now overdue. Meanwhile James Gunn and the DC Universe $WBD are having a great week with the latest Superman movie pulling in a total of $217 million in its opening weekend. It’s not like there was any pressure. Okay there was, in fact, a ton of pressure on the film. It was the hard relaunch of the DC superhero franchise under Warner Bros., released during a fragile time in the history of super hero movies. Marvel’s latest two franchises (“Thunderbolts” and “Captain America: Brave New World”) flopped compared to the “golden” era of Marvel, and people are dying for some good super hero action.
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Nvidia’s geopolitical balancing act pays off
Nvidia $NVDA is stuck in the middle of a bad relationship between the U.S. and China and it seems like CEO Jensen Huang is on a personal mission to fix it. Or, at least, he wants to try to get everyone to be more friendly, and he might have succeeded this week.
The U.S. government doesn’t want China to use American tech for military modernization and AI development, which, fair. So it recently imposed even stricter restrictions on the export of advanced A.I. chips to China.
This hasn’t been fun for Nvidia’s very important Chinese marketshare, which Nvidia says has gone from 95% to 50%. That also means Nvidia is losing a lot of money. Nvidia developed a chip (the ahem…watered-down “H20” chip) to be compliant with American laws, which, after that restriction revamp, is no longer in compliance.
In a recent interview with CNN Huang stated (yet again), “They [China] don’t need Nvidia’s chips, certainly, or American tech stacks in order to build their military.” He did note that in order for America to be the leader of the tech world, it needs to do business with China, or at least be able to poach some of China’s top talent. Huang says half of the world’s AI developers are in China.
Nvidia didn’t give up! After a few chats with both President Donald Trump and China – likely to give assurance Nvidia will support both parties – the chip maker says “The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon.” At a press conference in Beijing, Huang even told reporters he plans to deliver “more advanced chips into China than the H20.” A big sigh of relief for those urging the U.S. to play a little nicer with China, in order to ensure tech dominance. And Nvidia shareholders. The stock was up 5% on the news.
‘Crypto Week’ = Christmas in July for Bitcoin bulls
This fine July week was deemed the perfect five days to debate, tweak, and vote on a bunch of highly anticipated digital asset bills. People in favor of these bills are trying to pave a clearer way for crypto, stablecoin, etc to follow federal rules. There are two main bills we’re focused on:
The GENIUS Act:
- Focuses on regulating stablecoins at a federal level.
- Mandates that stablecoin issuers maintain 1:1 backing with high-quality liquid assets (like U.S. dollars or short-term Treasury bills).
- Gives repayment rights priority to coin holders in case of bankruptcy.
The CLARITY Act:
- This act aims to define what constitutes a digital commodity, excluding stablecoins, derivatives, and securities.
- Grants the Commodity Futures Trading Commission (CFTC) authority over digital commodities, while the Securities and Exchange Commission (SEC) would retain authority over investment contracts and securities related to cryptocurrency.
- Includes a “mature blockchain exemption” for decentralized blockchains to raise capital with reduced SEC registration burdens.
The GENIUS Act has passed the Senate. We should have a House vote by the time we all zoom away to the beach this weekend.
The CLARITY Act is a bit messer. Lawmakers on Wednesday decided to - last minute- combine the bill with another one that bans a central bank digital currency to try to make some members of the GOP happy. This left some members on the original bill perplexed. We’re unclear if we’ll get a vote on this by the weekend.
Bitcoin $BITCOIN has soared to over $123,000 (as of Thursday afternoon), breaking records at all-time highs. The anticipation of these bills passing has certainly led to increased market activity in the space. Even Ethereum $ETHEREUM had a little boost this week, climbing above $3,100 for the first time since February.
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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story.
