Markets responded with gains, and the US dollar strengthened against the euro and other risk assets after US President Donald Trump said he had no intention of firing Federal Reserve Chairman Jerome Powell, despite his disappointment that the central bank isn't taking more aggressive action to cut interest rates. "Never," Trump told reporters. "No, I'm not going to fire him. I just wish he would be a little more aggressive in his thinking about lowering interest rates."

Kevin Hassett, Director of the National Economic Council, told reporters last Friday that Trump had been reviewing whether he could dismiss Powell, following a series of social media posts and public comments criticizing the Fed. Last week, the president launched another tirade against Powell, right before the European Central Bank cut its key rate by a quarter point to 2.25% — about half the Fed's current rate of 4.25–4.5%.

Trump has repeatedly complained that the Fed is not cutting interest rates quickly enough, repeating his criticism during a recent speech and insisting that the market turmoil surrounding his comments was exaggerated. "We believe now is the time to cut rates, and we'd like the Fed Chair to do that in a timely manner — not too late," Trump said.

For reference, Powell and his colleagues have so far kept interest rates unchanged after cutting them by a full percentage point in the final months of 2024. Policymakers are waiting to see how the economy responds to the Trump administration's latest moves on tariffs, tax reforms, deregulation, and immigration.

Most Fed officials have stated that current policy is in a good place and that the central bank needs to maintain some pressure to keep inflation in check, which has remained above the 2% target for four years.

The US economy grew at a healthy 2.8% last year, but economists now believe tariffs will slow growth by the end of 2025. While the Fed traditionally cuts rates to support the economy in such cases, Powell and some of his colleagues have indicated that the central bank may have to prioritize the inflation side of its dual mandate, especially as tariffs could once again spur inflation.

In addition, the US dollar showed increased stability against a range of other currencies, as the White House said the administration was making progress in negotiations on trade deals aimed at reducing tariffs announced earlier this month.

Current EUR/USD Technical Picture

Buyers must focus on reclaiming the 1.1360 level. Only then will a test of 1.1430 become possible. From there, the path may open toward 1.1500, although reaching it without the support of large market players could be quite difficult. The furthest target is the 1.1570 high. If the instrument declines, I expect major buyer activity only near 1.1280. If there's no interest there, it would be prudent to wait for a new low around 1.1210 — or consider entering long from 1.1150.

Current GBP/USD Technical Picture

Pound buyers need to reclaim the nearest resistance at 1.3300. Only then will it be possible to aim for 1.3350, a level that has proven difficult to break. The furthest target is the 1.3416 level. In case of a decline, bears will attempt to regain control over 1.3240. If they succeed, a break of that range would deal a serious blow to the bulls and push GBP/USD down to the 1.3205 low, with a possible move toward 1.3165.