Joe Lavorgna, chief economist at SMBC Nikko Securities, who served on the National Economic Council during Trump's first term, said he saw little need for Trump to dial back his attacks, noting that he was making a "very classic macro argument" about the bank's flaws. "I'm completely on board with the president's sympathies or comments that the Fed has historically been late," he said, adding that he thought stock market falls had been driven primarily by questions about trade policy. He said he believed that Fed officials would remain more responsive to financial conditions than the president, noting that, if anything, Trump's pressure could make it more hesitant to cut, lest it be perceived as being cowed.

"Ultimately the Fed is going to do what's prudent," he said. "The question is just the timing." Powell, a longtime Washington lawyer whose term as chair is due to end next year, has maintained that he is unbothered – and uninfluenced – by the criticism and asserted that Trump does not have the legal authority to remove him.

But the strength of his position is a matter of legal debate. By law, Fed governors can only be removed for cause, but it is unclear whether that protection extends to the role leading the board. The administration has already taken steps to reduce the Fed's regulatory role and is engaged in a legal battle over expanding presidential authority over other government agencies set up with features, like for cause protections, intended to insulate them from partisan pressure.

Mark Spindel, founder and chief investment officer of the Washington-based investment advisory firm Potomac River Capital, who has worked with Prof Binder on Fed studies, noted that the tradition of Fed "independence" had evolved over time, often after political or economic crisis. "Things that are given can be taken away," he said, hours before Trump appeared to back off. Asked again for his thoughts a few days later, Mr Spindel wrote back just two words in reply: "Damage done."