President Trump's aggressive tariff policies and threats to fire Federal Reserve Chair Jerome Powell caused widespread concern among top advisors and CEOs, who warned of potential financial turmoil and empty store shelves.
These warnings, coupled with market volatility, prompted Trump to change course. He publicly stated he had no intention of firing Powell, easing tensions on Wall Street. Markets responded positively, with significant gains in major indices.
The warnings came from various sources: Trump's own advisors, America's largest CEOs (Walmart, Target, Home Depot, Lowe's), and market reactions. The CEOs directly warned Trump of disruptions to the supply chain and consequences for consumers, even suggesting empty shelves.
The White House, particularly Chief of Staff Susie Wiles, received numerous alarming calls about the economic fallout from Trump's actions.
Trump's shift in tone followed a meeting with retail CEOs, where concerns about rising economic fallout and market uncertainty were presented. While some advisors doubted Trump would actually fire Powell, his recent public rhetoric caused renewed uncertainty.
Trump's arguments for the Fed cutting rates were countered by Powell, who emphasized the Fed's independent decision-making process.
The White House, while initially suggesting exploring the possibility of firing Powell, ultimately backed down. Trump's later statement that he never intended to fire Powell suggests a retreat from previous aggressive statements.