Trump v Powell: What’s behind their spat?
Tensions between US President Donald Trump and US Federal Reserve chair Jerome Powell have hit a new high.
But why has the pair’s relationship deteriorated so badly? And what are the issues behind their spat?
Sky News correspondents Mark Stone and Paul Kelso take a closer look…
Powell’s independence is a problem for control-obsessed Trump
The feud between Donald Trump and Jerome Powell is as predictable as it is serious.
Jerome ‘Jay’ Powell holds one of the most powerful and influential positions in the world.
As chair of the US Federal Reserve, he wields the levers which control global economic stability, such is the power of the US dollar.
A trader works on the floor at the New York Stock Exchange. File pic: Reuters
The position comes with a huge amount of autonomy. Fed independence is seen to be paramount.
For a full-control-obsessed president like Donald Trump, that’s a problem.
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The American president cannot tell the Federal Reserve chair what to do – and that is by design.
But Trump could fire Powell if he chose to – unprecedented as that would be.
You only need to look at the market reaction to Trump’s language about Powell for a hint at how his firing would impact the global economy.
“Powell’s termination can’t come fast enough,” Trump said last week.
On Monday, he called Powell a “major loser”. This schoolyard language has global economic implications.
The markets – including the all-important bond markets – reacted with sell-offs at the end of the day.
Donald Trump leaves the Rose Garden after announcing Jay Powell as his nominee to become chairman of the US Federal Reserve in 2017. File pic: Reuters
Powell is a registered Republican. Trump hired him as Fed Reserve Chair during his first term but the relationship became fractious, fast.
Yet Trump did not remove him back then.
The position has a four-year term and President Joe Biden nominated him to a second term in 2022. That gives him until 2026.
Trump sees Powell increasingly as a barrier to his agenda. Trump’s ‘burn hot’ economy ideology does not align with Powell’s more pragmatic centrist ideology.
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He is unable to influence and bend Powell in the way that he has done with his own cabinet and members of Congress.
In his first term, Trump was talked out of removing Powell. But we know this second term is wholly different. He was talked away from the edge on many issues during his first term. This time, in many areas, he’s jumped.
Remember, Trump forced out two FBI directors – one in each term – because neither was considered to be loyal enough. The FBI, like the Federal Reserve, is considered traditionally to be independent.
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Of course, the Federal Reserve has a profound global influence in a way the FBI, as an institution, does not.
The fed chair, with his role in setting interest rates and so much more, is arguably the last powerful, independent pillar of the economic policy structure in the US.
Congress has largely devolved its role to Trump and the executive branch, as illustrated by his tariff plans (which Congress could have influenced but chose not to).
Donald Trump’s removal of Jay Powell and replacement with a compliant loyalist could fundamentally shake the global economy.
Powell is one of the few reliable actors left defending economic stability in the US
Paul Kelso, business and economics correspondent
Donald Trump’s disparagement of Jay Powell as a “major loser” is not the first time he has insulted the man he appointed as chair of the US Federal Reserve in 2018.
The president appears to have had buyer’s remorse from the moment he approved the former investment banker to fill a post that is fundamental to US economic stability.
Trump was calling for the Fed to cut rates and stimulate the economy long before he was re-elected, but online barbs have more consequence when fired from the Oval Office than the campaign trail.
Equivalent to the Governor of the Bank of England, the chair of the Federal Reserve ultimately directs US monetary policy, including the setting of short-term interest rates, with the aim of maintaining high employment and stable inflation.
That makes Powell a crucial figure amid the chaos and incoherence of Trump’s economic policy, which in less than 90 days has shattered the certainties that made America the world’s largest economy, and the dollar the global reserve currency.
Jay Powell speaks to the media in March. File pic: Reuters
The market reaction to Trump’s venting against Powell, and briefing that his administration is considering ways to remove him from office, suggests investors fear it will make a bad situation worse.
As traders returned from the Easter weekend with the president’s criticism of Powell ringing in their ears, the “Trump slump” deepened.
US stocks and the dollar fell, while yields on US Treasuries – the mechanism by which the government borrows money – rose, indicative of falling bond prices as investors dumped US debt.
Gold prices, meanwhile, hit a record $3,500 an ounce as investors piled into what remains the pre-eminent “safe haven” asset in times of uncertainty.
The combination of falling equity, currency and bond prices is a toxic trifecta more usually associated with emerging economies in political crisis, not the mighty United States.
We saw something similar here in 2022, when Liz Truss and Kwasi Kwarteng’s unfunded tax cuts, presented without an independent assessment from the Office for Budget Responsibility, caused a run on the gilt market.
Then it was the Bank of England that stepped in to stabilise the bond market.
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How will tariffs impact you?
What’s happening in the US is both bigger and more consequential.
Trump’s tariff program, seemingly imposed and withdrawn by presidential whim, has already proved disastrous for market sentiment, with expectations of higher inflation and lower growth, at home and globally, set to be confirmed by the International Monetary Fund in Washington this week.
Powell and the Fed are among the few reliable actors in this drama, with markets betting their next meeting in May will see rates held, in part because of inflationary policy made in the White House.
The prospect of Powell being replaced by a more pliant figure hand-picked by Trump would pull another block from the wobbling Jenga tower of US economic credibility.
The independence of the Fed is one of the foundations of American stability, an assumption that underpins the $29 trillion Treasuries market that makes the world’s debt go round.
If investors large and small, state and private, fear that the US is not good for that debt, it could be calamitous for American pre-eminence and the global economy.
Powell’s term ends in 2026 and he believes he cannot be removed by presidential decree.
That does not mean he will not face more pressure to stand aside.
There are no survivors from a factory explosion that ripped through a munitions plant in rural Tennessee, police have confirmed.
Eighteen people were missing after the huge blast, but Humphreys County Sheriff Chris Davis has now confirmed all died.
It happened on Friday morning at Accurate Energetic Systems, a company which supplies and researches explosives for the military.
Officers guard the gate at Accurate Energetic Systems military explosives plant. Pic: Reuters
It scattered debris over at least half a mile (800m) and was felt by residents more than 15 miles (24km) away, Mr Davis said.
Aerial footage showed the company’s hilltop location smouldering and obliterated by smoke for much of Friday, with just a mass of twisted metal, burned-out shells of cars, and an array of debris left behind.
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Emergency services have been unable to fully attend the site due to secondary blasts.
Mr Davis described it as one of the worst scenes he had ever seen.
“What we need right now is we need our communities to come together and understand that we’ve lost a lot of people,” he said.
The cause of the blast, which occurred about 60 miles southwest of Nashville, is not yet known but Mr Davis said it could be days, weeks or even months before foul play is ruled out.
Guy McCormick, a supervisory special agent with the Bureau of Alcohol, Tobacco, Firearms and Explosives said experts need to make the area safe before specialist investigators begin combing through the remains.
He said the safety and security of the scene could change quickly because of the heat and pressure caused by the explosion.
Signs near the site on Saturday asked for prayers for the families.
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Terry Bagsby, 68, who works at a petrol station nearby, said people in the close-knit community were “very, very sad”.
“I don’t know how to explain it… Just a lot of grief,” he added.
Actress Diane Keaton, who starred in films including The Godfather and Annie Hall, has died aged 79.
Keaton’s daughter, Dexter Keaton White, confirmed her death to Sky’s US partner network NBC News.
With a long career, across a series of movies that are regarded as some of the best ever made, Keaton was widely admired.
She was awarded an Oscar, a BAFTA and two Golden Globe Awards, and was also nominated for two Emmys, and a Tony, as well as picking up a series of other Academy Award and BAFTA nominations.
Diane Keaton, with her best actress Oscar for Annie Hall in 1978. Pic: AP
Her best actress Oscar was for the Woody Allen film Annie Hall which is said to be loosely based on her life.
She appeared in several other Allen projects, including Manhattan, as well as all three Godfather movies, in which she played Kay, the wife and then ex-wife of Marlon Brando’s son Michael Corleone, played by Al Pacino, opposite him as he descends into a life of crime and replaces his father in the family’s mafia empire.
With Woody Allen in 1978. Pic: Adam Scull/PHOTOlink.net/AP
Keaton was the kind of actor who helped make films iconic and timeless, from her heartbreaking turn as Kay Adams-Corleone to the “La-dee-da, la-dee-da” phrasing as Annie Hall, bedecked in the now famous necktie, bowler hat, vest and khakis.
Keaton also frequently worked with Nancy Meyers, starting with 1987’s Baby Boom.
Their other films together included 1991’s Father Of The Bride and its 1995 sequel, as well as 2003’s Something’s Gotta Give.
In 1996, she starred opposite Goldie Hawn and Bette Midler in The First Wives Club, about three women whose husbands had left them for younger women.
Keaton (centre) with Goldie Hawn (L) and Bette Midler at the premiere of The First Wives Club in 1996. Pic: AP
More recently, she collaborated with Jane Fonda, Mary Steenburgen and Candice Bergen on the Book Club films.
‘Brilliant, beautiful’
Diane Keaton. Pic: AP
The unexpected news was met with shock around the world.
Her First Wives Club co-star Midler wrote on Instagram: “The brilliant, beautiful, extraordinary Diane Keaton has died. I cannot tell you how unbearably sad this makes me.
“She was hilarious, a complete original, and completely without guile, or any of the competitiveness one would have expected from such a star. What you saw was who she was … oh, la, lala!”
Actor Ben Stiller paid tribute on X, writing: “Diane Keaton. One of the greatest film actors ever. An icon of style, humor and comedy. Brilliant. What a person.”
Kate Hudson, whose mother is Goldie Hawn, posted simply: “We love you so much Diane.”
In her Instagram tribute, Emmy, Grammy, Oscar, and Tony award-winning actress and producer Viola Davis said: “No!! No!!! No!! God, not yet, NO!!! Man… you defined womanhood.
“The pathos, humor, levity, your ever-present youthfulness and vulnerability – you tattooed your SOUL into every role, making it impossible to imagine anyone else inhabiting them.
“You were undeniably, unapologetically YOU!!! Loved you. Man… rest well. God bless your family, and I know angels are flying you home.”
Keaton never married. She adopted her daughter Dexter in 1996 and a son, Duke, four years later.
Donald Trump has announced the US will impose an additional 100% tariff on China imports, accusing it of taking an “extraordinarily aggressive position” on trade.
In a post to his Truth Social platform on Friday, the US president said Beijing had sent an “extremely hostile letter to the world” and imposed “large-scale export controls on virtually every product they make”.
Mr Trump, who warned the additional tariffs would start on 1 November, said the US would also impose export controls on all critical software to China.
The president added that he was imposing the tariffs because of export controls placed on rare earths by China.
He wrote: “Based on the fact that China has taken this unprecedented position, and speaking only for the USA, and not other nations who were similarly threatened, starting November 1st, 2025 (or sooner, depending on any further actions or changes taken by China), the United States of America will impose a tariff of 100% on China, over and above any tariff that they are currently paying.
“It is impossible to believe that China would have taken such an action, but they have, and the rest is history. Thank you for your attention to this matter!”
President Trump says he sees no reason to see President Xi as part of a trip to South Korea. Pic: Reuters
Mr Trump said earlier on Friday that there “seems to be no reason” to meet with Chinese leader Xi Jinping in a scheduled meeting as part of an upcoming trip to South Korea at the end of this month.
He had posted: “I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems no reason to do so.”
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The trip was scheduled to include a stop in Malaysia, which is hosting the Association of Southeast Asian Nations summit, a stop in Japan and then the stop to South Korea, where Mr Trump would meet Mr Xi ahead of the Asia-Pacific Economic Cooperation summit.
Mr Trump added: “There are many other countermeasures that are, likewise, under serious consideration.”
The move signalled the biggest rupture in relations in six months between Beijing and Washington – the world’s biggest
factory and its biggest consumer.
It also threatens to escalate tensions between the two countries, prompting fears over the stability of the global economy.
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Friday was Wall Street’s worst day since April, with the S&P 500 falling 2.7%, owing to fears about US-China relations.
China had restricted the access to rare earths ahead of the meeting between Presidents Trump and Xi.
Under the restrictions, Beijing would require foreign companies to get special approval for shipping the metallic elements abroad.
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