Trump maintains Powell as Fed chair, hints at China tariff cuts
U.S. President Donald Trump declared that he does not intend to dismiss Federal Reserve Chairman Jerome Powell, even though he previously called him a "major loser." Trump also suggested the possibility of reducing tariffs on China.
What do you need to know?
- Donald Trump does not intend to fire Federal Reserve Chairman Jerome Powell, despite publicly criticizing him and calling him a "major loser."
- The U.S. President is pushing for a reduction in interest rates, claiming that it is the perfect time for such a move.
- Trump promises to be "very nice" in trade talks with China, which could lead to tariff reductions.
I would like to see him uh be a little more active in terms of his idea to lower interest rates. This is a perfect time to lower interest rates. Uh if he doesn't, is it the end? No. It's not, but it would be good timing. It would be it would it should could have taken place earlier, but no, I have no intention to fire him - said the president during the swearing-in of the new Chair of the Securities and Exchange Commission (SEC), Paul Atkins.
At the same time, he reiterated his view that Powell reacts too late to changing economic conditions.
Trump also referred to a post he made on social media the day before, warning that further hesitations by the Fed Chairman regarding rates could slow down the economy. He even suggested in the past that he was considering ending Powell’s term early, which expires next year.
The president's statements once again caused concern in the financial markets and contributed to declines on Wall Street. Jerome Powell, on his part, announced caution in monetary policy, citing inflation risks that the tariffs imposed by the Trump administration could trigger.
Will Trump reduce tariffs on China?
On the same day, Trump suggested the possibility of reducing tariffs on China if a trade agreement is reached. He emphasized that relations with Chinese President Xi Jinping are good and that talks are to proceed in a nice atmosphere.
I’m not going to say, ‘Oh, I’m going to play hardball with China, I’m going to play hardball with you, President Xi.’ No, we’re going to be very nice. We’ll see what happens. But ultimately, they have to make a deal, because otherwise they’re not going to be able to deal in the United States. And we want them involved - stated Trump.
Meanwhile, according to Bloomberg reports, Treasury Secretary Scott Bessent described the negotiations with China as "a slog" during a closed meeting organized by JP Morgan. He acknowledged that the current tariff levels - approximately 145% on goods from China and 125% on American products - are unsustainable in the long-term, but that does not mean a desire to completely sever cooperation with Beijing.
