Trump Denies He's Firing Powell, Helping S&P 500 Reverse Losses

President Donald Trump denied reports that the White House is discussing Federal Reserve Chairman Jerome Powell, adding that the change in the leadership of the central bank will come next year.

"We are not planning on doing anything," Trump told reporters Wednesday. Still the president said Powell could leave his post if there is evidence of fraud in the renovation of the Federal Reserve headquarters.

Speaking to reporters, Trump reiterated his criticism of Powell for the Fed decision to keep interest rates high, even as other central banks around the world have started cutting their borrowing costs.

Earlier in the day, news organizations cited an administration official as saying that the President is considering firing Powell soon. That sent the $S&P 500 Index (.SPX.US)$ declining. The benchmark pared its losses to end the trading day 0.3% higher after Trump denied the story.

That fueled speculation that Trump could just be testing the waters to see the market reaction should he take the drastic move of removing Powell from the top post in the Fed before his term is up in May.

Powell has previously stated that he has no intention of leaving his post, adding that his removal by the President is "not permitted under the law."

The Supreme Court in May signaled that the Fed chair cannot be removed by the President without cause, as it explicitly stated that the central bank is "a uniquely structured, quasi-private entity," unlike other federal agencies.

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