U.S. President Donald Trump said Wednesday he is not planning to fire Federal Reserve Chair Jerome Powell, after a Bloomberg report that the president is likely to do so soon sparked a drop in stocks and the dollar, and a rise in Treasury yields.

Such reports are not true, Trump said.

"I don't rule out anything, but I think it's highly unlikely unless he has to leave for fraud," Trump said, a reference to recent White House and Republican lawmaker criticism of cost overruns in the $2.5 billion renovation of the Fed's historic headquarters in Washington.

Stocks pared losses and Treasury yields pared declines after Trump's comments, which also included a now familiar barrage of criticism against the Fed chair for not cutting interest rates, calling him a "terrible" chair.

Trump did talk with some Republican lawmakers about firing Powell, he said, but said he is more conservative about his approach to the question than they are.

In response to a question about whether the White House has given any indication that the president intends to try to fire Powell, a Fed official pointed to Powell's public statements that he intends to serve out his term.

Powell, who was nominated by Trump in late 2017 to lead the Fed and then nominated for a second term by Democratic President Joe Biden four years later, is serving a term that goes through May 15, 2026.

Last week, the White House intensified its criticism of how the Fed is being run when the director of the Office of Management and Budget, Russell Vought, sent Powell a letter saying Trump was "extremely troubled" by cost overruns in the $2.5 billion renovation of its historic headquarters in Washington.

Powell responded by asking the U.S. central bank's inspector general to review the project, and the central bank posted a 'frequently asked questions' factsheet, which rebutted some of Vought's assertions about VIP dining rooms and elevators that he said added to the costs

Source: Investing.com