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Markets only need excitement to get. This time it was Donald Trump, who revived the flame and suddenly softened his line to two burning items: a federal reserve system and Chinese customs. “No plan to replace Jerome Powell”He said and broke with his past virulent criticism. He also opened the door to reduce the price of Chinese imports. When looking for soothing signals, two appeasuement gestures immediately doped, which immediately doped global financial centers.
In short
- Donald Trump softens his position on two sensitive fronts: Jerome Powell remains in the office and customs duties in China could be reduced.
- These statements mean an unexpected turn contrasting with Trump’s past criticism against the federal reserve system and its aggressive business policy.
- Financial markets respond positively: a high increase in American, Asian and European tracks.
- Questions in the medium term on the stability of American economic policy persist for this obvious relaxation.
Markets and Fed: Changing the tone that assures Wall Street
During the Donald Trump press briefing, Trump calmed the game on two sensitive fronts. “I don’t plan to replace Jerome Powell”He said against all the chances.
The exit, which contrasts with his repeated attacks against the President Fed, who previously accused of saboting economic growth according to too restrictive policy of measure. The President’s conciliatory tone surprised, especially because he doubled with an unexpected outstretched hand on the Chinese commercial ensemble.
Trump has indeed mentioned a possible reduction in customs, which is currently up to 145 % for some products from China. Explains:
We must negotiate an agreement that is only for both countries.
This double slope had an immediate effect on the markets:
- The S&P 500 jumped by 1.9 %, which was evidenced by the rapid restoration of investors’ confidence;
- Dow Jones increased by 1.4 %, powered mainly by industrial values;
- Nasdaq won 2.8 %, boring hope for a more predictable economic climate;
- Nikkei 225 in Japan closed 1.7 %and European scholarships followed this trend with a significant increase.
Investors appreciated the perceived tendency as a return to the form of predictability after months of contradictory signals.
Global economic consequences to predict
In addition to the immediate market, these statements ask new questions about Donald Trump’s overall economic strategy. While the US President has long cultivated the rhetoric of economic confrontation with China and put unprecedented pressure on the Fed, his change from your brand was a turning point.
According to some analysts, you must see the desire to assure business circles. These political uncertainties are still concerned about the International Monetary Fund. The IMF reduced its global growth forecasts to 2025 to 2.8 %, compared to 3.3 % initially, as it shows the persistent risks associated with trade tension and unpredictable policies.
The independence of the federal reserve system also remains a point of vigilance. If Trump says he does not want to exclude Jerome Powell, his history of increasing concern about future political pressures. This ambivalent posture could blur the signals sent to international markets and partners.
In addition, the possible softening of customs duties does not guarantee the solution of structural imbalances on the American exchanges. Some observers believe that Republican voters could perceive this tendency as a sign of weakness, while financial circles consider it welcome pragmatism.
It remains to be determined whether these gestures are integrated into a permanent strategy or whether it is just tactical adjustments. In the coming months, they will assess the consistency of this line. Meanwhile, markets have responded positively, but economic foundations remain subjected to deep structural tension.
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A graduate of the Toulouse and the Blockchain Consultant Certification certification holder and I joined the adventure of Cointribuna in 2019. I convinced of the potential of blockchain to transform many economy sectors, committing to raising awareness and informing the general public about how the ecosysty developed. My goal is to allow everyone to better understand blockchain and take the opportunity they offer. I try to provide an objective analysis of messages every day, decrypt trends on the market, hand over the latest technological innovations and introduce the economic and social issues of this revolution.
Renunciation
The words and opinions expressed in this article are involved only by their author and should not be considered investment counseling. Do your own research before any investment decision.