By Nandita Bose

WASHINGTON (Reuters) -President Donald Trump on Tuesday appeared to take threats to fire Federal Reserve Chair Jerome Powell off the table after days of intensifying criticisms of the central bank chief over not cutting interest rates.

"I have no intention of firing him," Trump told reporters in the Oval Office on Tuesday. "I would like to see him be a little more active in terms of his idea to lower interest rates," he added.

The de-escalation drew an immediate thumbs up from Wall Street, as equity index futures jumped by 1.8% on resumption of trading on Tuesday evening. Stocks, bonds and the U.S. dollar had all slumped on Monday following an Easter holiday weekend featuring repeated attacks by Trump on Powell for not further cutting interest rates since the president resumed office in January.

Meanwhile, Trump during the same question-and-answer volley with reporters expressed optimism that a trade deal with China could "substantially" cut tariffs, which also provided a boost for investors. He said a deal would result in "substantially" lower tariffs on Chinese goods, suggesting that a final deal will not "be anywhere near" current tariff rates. But he added that "it won't be zero."

The broadsides were often accompanied by threatening remarks, such as last week's social media posting that Powell's termination as Fed chair "cannot come fast enough." Those threats spooked financial markets that view the Fed's independence as underpinning its credibility as the world's most influential central bank and a cornerstone of global financial stability.

But while Trump seems to have set aside those threats for now, his criticisms of Fed rate policy remain just as pointed.

"We think that it's a perfect time to lower the rate, and we'd like to see our chairman be early or on time, as opposed to late," Trump said.

Trump's sour grapes with Powell date back to the Republican's first term in the White House. Trump elevated Powell from a Fed Board of Governors member to the central bank's head but was soon irritated by ongoing rate increases under Powell's watch. Trump openly mused about firing Powell, but was ultimately dissuaded by his advisers.

Whether Trump has the authority is unclear. Powell, for his part, insists that the Federal Reserve Act of 1913 that created the central bank will not allow it. Trump, meanwhile, has said that if he wanted Powell out, he would be gone "real fast."