The President of the United States, Donald Trump, retained his threat to dismiss the head of the American federal reserve, after his large verses against the boss of the Central Bank caused a diver on the stock market and the dollar.
Trump’s comments seemed to exclude any imminent plan on Tuesday to remove the president from the federal reserve, Jerome Powell, which the American president criticized several times for not having evolved faster at lower interest rates.
“The press fled with things. I have no intention of dismissing him,” Trump told journalists in the White House.
“I would like to see him be a little more active in terms of his idea of reducing interest rates. This is the ideal time to reduce interest rates. If he doesn’t do it, is this the end? No, this is not the case. “
US stock contracts, which are exchanged outside regular market hours, increased following Trump’s comments, with contracts related to S&P 500 and NASDAQ-100 technology, up more than 1.70% and 1.90%, respectively.
The US dollar has increased by more than 1% compared to the main currencies.
Wall Street joined earlier Tuesday after the US Treasury Secretary Scott Bessent told a conference on investors that a trade war with China was “unbearable” and that he expected the parties to defuse tensions and conclude an agreement at a given time.
After Bessent’s remarks, the White House press secretary Karoline Leavitt said that Trump administration “was preparing the ground for an agreement with China” and “did very well” to progress to an agreement.
The S&P 500 closed more than 2.5%, while the Nasdaq finished more than 2.7% more.
Asian markets opened more on Wednesday, with the Nikkei 225 in Japan and Kospi from South Korea up approximately 2% and 1%, at the start of negotiations respectively.
The United States and China are locked in an effective commercial embargo after Trump has imposed a 145% rate on most Chinese products, and China stuck 125% on American exports in retaliation.
Trump acknowledged on Tuesday that the price on China was “very high” and said that the rate “would drop considerably”.
Trump’s repeated attacks against Powell have upset the financial markets in the light of the economic consensus overwhelming that the independence of the federal reserve is crucial for the health of the American economy.
Wall Street underwent some of his most steep losses of the year on Monday after Trump marked Powell a “big loser” and “Mr. Too late ”so as not to support the reductions in the reference interest rate, which influences borrowing costs throughout the economy.
Trump comments occurred after he said last week that Powell’s termination cannot come quickly enough “and his best economic advisor, Kevin Hassett, said the administration was studying the possibility of withdrawal.
The federal reserve, which reduced the reference rate for the last time in December, expressed prudence as to the reduction in short -term borrowing costs, with regard to the concerns that Trump’s radical rates will stir up inflation.
Trump rejected concerns about how his trade war will cause higher prices, unlike the opinions of most economists, and argued that the prudent position of the Central Bank slows down the economy.
Powell, who was appointed by Trump in 2017 and operated to serve another four -year term by former American president Joe Biden, said he would not resign if he was asked and said he could only be rejected for crisis.
Independent federal agencies such as the federal reserve can only be deleted for a “cause” under the legal preceding established by the Supreme Court of the United States, although the Trump administration is questionable that the standard before the court in a case involving the Merit Systems Protection Board and the National Labor Relations Board.
Any decision to withdraw Powell before the end of his mandate would probably send shock waves via the financial markets given the long -standing expectation that the federal reserve should make its decisions without political considerations.
“I would expect to see a spectacular drop in the equity and bond markets,” said professor of economics at Villanova, Pennsylvania, in Al Jazeera Erasmus Kersting at Villanova in Villanova in Villanova.
“The” Sell USA “strategy would become common. This would also have an impact on the real economy, which would lead to a recession. ”
