Washington, DC – US President Donald Trump expressed confidence in Federal Reserve Chairman Jerome Powell, stating that he does not have any plans to dismiss him despite previous criticisms. However, Trump did mention that he would like to see Powell take a more proactive approach in lowering interest rates. The president also voiced optimism regarding the potential for improved trade relations with China.
Last week, Trump escalated his criticism of Powell, referring to him as “a major loser.” This led to a drop in stock prices, bond values, and the US dollar. Despite this initial reaction, financial markets have shown signs of recovery in the days following these comments. Trump’s latest remarks come amid speculation about the possibility of removing Powell from his position, a move that has never been attempted by any previous US president.
In terms of trade negotiations with China, Trump indicated that he is willing to adopt a kinder approach and suggested that tariffs could be reduced pending a trade agreement. Treasury Secretary Scott Bessent also expressed optimism regarding the resolution of trade tensions, referring to the current situation as unsustainable.
Following these statements, major Asian stock markets experienced gains. The Nikkei 225 in Japan rose by approximately 1.7%, the Hang Seng in Hong Kong saw a 2.3% increase, and China’s Shanghai Composite showed a slight uptick. These positive movements were reflected in US markets as well, with both the S&P 500 and Nasdaq rising on Tuesday.
The ongoing trade dispute between the US and China, along with tariffs imposed on other countries, has contributed to global economic uncertainty. The International Monetary Fund (IMF) recently downgraded its forecast for US economic growth, attributing the revision to tariff-related uncertainty. The IMF also predicted a notable slowdown in global growth due to the escalation of tariffs and trade tensions.
Under Trump’s administration, tariffs on Chinese imports have reached as high as 145%. In response, China has implemented a 125% tax on US products and vowed to retaliate. This tit-for-tat escalation of tariffs has raised concerns about the impact on both economies and the global economic landscape as a whole.