Trump Again Calls for Fed to Cut Rates, Says Powell’s ‘termination Cannot Come Fast Enough’

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Economic

Summary:

President Donald Trump on Thursday again called for the Federal Reserve to lower rates and even hinted at the "termination" of Chairman Jerome Powell.

In a Truth Social post, Trump said:

"The ECB is expected to cut interest rates for the 7th time, and yet, 'Too Late' Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete 'mess!' Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell's termination cannot come fast enough!"

Indeed, the European Central Bank has been cutting rates as it tries to boost growth in the region. The ECB is expected to lower rates again later on Thursday.

The post comes a day after Powell delivered a speech at the Economic Club of Chicago in which he noted that the administration's tariffs put the central bank in a tricky spot as it decides whether to tame inflation or boost growth.

"If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close," Powell said. Those comments contributed to a steep sell-off on Wednesday.

This isn't the first time Trump has criticized Powell's approach to U.S. monetary policy. Trump posted on April 4, two days after the administration's "Liberation Day" tariff announcement, it would be "a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always 'late,' but he could now change his image, and quickly."

However, it's the first time Trump has explicitly called for Powell's firing. Powell has also said the president doesn't have the power to fire him, noting that it's "not permitted under the law."

Powell's term as Fed chairman ends in May 2026.

Source: CNBC

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Warren Takunda

Economic

A few weeks on from Washington’s first wave of tariff announcements, international trade data points to a subdued outlook, with key indicators signalling serious risk of trade diversion to Europe as a result of the disruption in trade between US and China, according to the World Trade Organization (WTO).

The WTO's “Global trade outlook” released on Wednesday found decoupling Chinese and US economies would lead to an 81% plunge of merchandise trade between both countries in 2025 and 91% without the recent exemptions granted by the US administration for products such as smartphones.

As a consequence, the report foresees an increase of 6% of Chinese exports to Europe. But Europe, hit too by US tariffs, will also look for other markets for its exports, the WTO says.

“This is a two-way street, there will also be some European exports diverted to other economies,” WTO Chief Economist Ralph Ossa claimed, adding: “Think about the high tariffs that are in place on motor vehicles for example. This is a way through which these tensions could potentially propagate.”

The US has imposed 25% tariffs on EU cars, steel and aluminium. US tariffs of 10% apply also to other EU exports.

The tensions between China and the US has been escalating with Chinese exports to the US being hit with 145% tariffs and US goods to China facing 125% tariffs.

More generally, Chinese merchandise exports are projected to rise by 4% to 9% across all regions outside North America, according to the report’s forecasts.

Lessons will have to be learned, WTO Director-General Ngozi Okonjo-Iweala said about the world trade disruptions as she announced a decline by 0.2% of the volume of world merchandise trade in 2025, which amounts to nearly three percentage points lower than expected.

“One of the clearest lessons of the COVID-19 crisis is the importance of diversifying sources of supply. Today’s trade tensions remind us that we must also diversify demand,” she said, adding: “Overconcentration, whether it is where we buy from, or where we sell to, leads to over dependence, making economies more vulnerable to shocks and fostering a sense of unfair burden-sharing.”

The report said that the decoupling between US and Chinese economies will contribute to a broad fragmentation of the global economy along geopolitical lines in two isolated blocs.

It will also have an impact on the world GDP. “Our estimate is that global world GDP would be lowered by nearly 7% in the long term,” Okonjo-Iweala said.

Source: Euronews

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Michelle

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Central European currencies held stable on Thursday while stocks firmed as markets were looking ahead to a rate meeting by the European Central Bank later in the day.

The ECB is expected to cut interest rates for the seventh time in a year on Thursday, looking to prop up an already struggling economy that will take a large hit fromU.S. tariffs.

While U.S. PresidentDonald Trumphas paused most of the heftiest tariffs, many remain in place and volatility in financial markets has already done damage.

"CEE currencies will be looking to the ECB meeting today, but that should confirm the current market stance and not show much change for CEE," ING wrote in a note.

"Still, we believe the ECB will be an important benchmark for CEE central banks as they face U.S. tariffs and the deteriorating economic outlook," ING said.

Hungary's forintwas little moved, trading at 407.65 per euro, moving away from a near three-month-low hit on Monday.

"The forint has stabilised. The EUR/HUF exchange rate is trading below the short-term resistance level of 408.50, while the next significant support is seen at 405. ... however, this afternoon’s ECB interest rate decision could stir up fresh movements in the currency market," brokerage Equilor wrote.

The forint was helped this week by comments from incoming Central Bank Deputy Governor Zoltan Kurali who said on Tuesday that the bank must maintain a positive real interest rate to ensure both financial market and price stability.

The Polish zlotywas stable, halting losses after slipping to a four-and-a-half month low in the previous session. The currency traded at 4.2815 versus the euro.

"The EUR/PLN rate may move in the range of 4.26-4.30 in the near future. The day will be dominated by the meeting of the European Central Bank, and the expected cut will support market rates at low levels," Bank Millennium wrote.

Earlier this month, Poland's central bank governor Adam Glapinski said interest rates could be cut as soon as May if incoming economic data supported the easing of inflation pressures. Borrowing costs in Poland have remained unchanged since October 2023.

The Czech crownwas a touch weaker, trading 0.05% down versus the euro at 25.03.

Stocks were higher, with Warsaw's equitiesleading gains as the index added 1.4%. Budapestwas up 0.1% while Pragueadded 0.3%.

Source: TradingView

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Warren Takunda

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Asian shares mostly rose Thursday, despite the continued fretting over President Donald Trump’s trade war, with all eyes on negotiations that just began between the administration and Japan.

Japan’s benchmark Nikkei 225 gained 1.3% to 34,343.11 in afternoon trading.

Honda stock price jumped 2.1% after the Japanese automaker said it plans to move its production of the five-door Civic hybrid electric vehicles for the U.S. market from Japan to the company’s plant in Indiana.

Honda Motor Co. didn’t say the move was in response to Trump’s tariff policies but stressed it moves production to where there is demand. Production of the U.S.-bound five-door Civic HEV began at the Yorii plant outside Tokyo in February. So far 3,000 vehicles have been produced there for the U.S. market.

Trump joined Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick in the talks with the Japanese delegation in Washington. “Hopefully something can be worked out which is good (GREAT!) for Japan and the USA!” Trump wrote in a social media post ahead of the meeting.

Australia’s S&P/ASX 200 gained 0.7% to 7,813.00. South Korea’s Kospi edged up 1.0% to 2,471.51. Hong Kong’s Hang Seng added 1.0% to 21,271.39, while the Shanghai Composite was little changed, slipping less than 0.1% to 3,274.68.

U.S. stocks fell Wednesday after Nvidia warned new restrictions on exports to China will chisel billions of dollars off its results. The S&P 500 sank 2.2% after falling as much as 3.3% earlier. Such an amount would have vied for one of its worst losses in years before the historic, chaotic swings that have upended Wall Street in recent weeks.

The Dow Jones Industrial Average dropped 699 points, or 1.7%, and the Nasdaq composite sank a market-leading 3.1%.

Many investors are bracing for a possible recession because of Trump’s tariffs, which he has said he hopes will bring manufacturing jobs back to the United States and trim how much more it imports from other countries than it exports. A survey of global fund managers by Bank of America found expectations for recession are at the fourth-highest level in the last 20 years.

The World Trade Organization said Wednesday it expects tariffs to cause a 0.2% decline in the volume of world merchandise trade for 2025. That’s if the tariff situation remains as it was on Monday. Trade could shrink by 1.5% this year if conditions worsen, the WTO said.

All told, the S&P 500 fell 120.93 points to 5,275.70. The Dow Jones Industrial Average dropped 699.57 to 39,669.39, and the Nasdaq composite sank 516.01 to 16,307.16.

Treasury yields eased in the bond market, taking a leg lower following the comments from the Fed’s chair. The yield on the 10-year Treasury fell to 4.28% from 4.35% late Tuesday and from 4.48% at the end of last week.

In energy trading, benchmark U.S. crude rose 87 cents to $63.34 a barrel. Brent crude, the international standard, gained 75 cents to $66.60 a barrel.

In currency trading, the U.S. dollar rose to 142.74 Japanese yen from 141.74 yen. The euro cost $1.1358, down from $1.1401.

Source: AP

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Warren Takunda

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London stocks fell in early trade on Thursday after Federal Reserve chair Jerome Powell warned that Trump’s tariffs could cause a spike in inflation.

At 0900 BST, the FTSE 100 was down 0.4% at 8,240.04.

In a speech on Wednesday at the Economic Club of Chicago, Powell said that Trump’s tariff regime was "significantly larger than anticipated".

"The same is likely to be true of the economic effects, which will include higher inflation and slower growth," he said.

"We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension."

Steve Clayton, head of equity funds at Hargreaves Lansdown, said: "Federal Reserve Chairman, Jerome Powell unnerved markets last night, warning of the potential impacts of current policy actions upon inflation and growth in the USA. He indicated that the Fed would probably put its anti-inflation mandate ahead of the target to see full employment in the USA if price pressures ticked higher.

"That led to selling on Wall Street, with the tech sector bearing the brunt."

Clayton said tariffs continue to make the headlines after Donald Trump claimed that "big progress" had been made in talks with Japanese negotiators.

"No details were given. Japan has strong links with the major US defence contractors and some US commentators are suggesting that tariff concessions may be granted if Japan ups its spending on US arms," he said. "Asian markets took the news as a reason to recover some of the previous session’s losses, with Japan’s Nikkei index posting gains of over 1%.

"Investors will have to become accustomed to information deficits under this most transactional of Presidents. Trump’s tactics so far have been to claim that injustices have been inflicted upon America and that punishments will be delivered, unless the offending nations bring something shiny to the table. With negotiations happening behind closed doors, investors are left guessing. But with most of the Reciprocal Tariffs stayed for three months, the window of uncertainty is not that long."

Looking ahead to the rest of the day, investors were eyeing the latest policy announcement from the European Central Bank, which is widely expected to announce a 25 basis points rate cut.

In equity markets, Fresnillo, Rolls-Royce, Unite, Jupiter Fund Management, Weir Group and Travis Perkins all lost ground as they traded without entitlement to the dividend.

On the upside, Sainsbury’s rallied as it said full-year underlying pre-tax profit rose 8.6% to £761m but also cautioned it does not expect any profit growth in the next year.

Tesco also gained.

Dunelm shot higher as the homeware retailer said it was on track to meet consensus expectations for full-year profit as it reported a jump in third-quarter sales.

Pest control firm Rentokil nudged up as IT reported a rise in first-quarter revenue despite a softer performance from its North America business.

Deliveroo advanced as it hailed a strong first-quarter performance, with gross transaction value 9% higher and order growth of 7%.

Source: Sharecast

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Glendon

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China–U.S. Trade War

BEIJING (April 17): China's commerce ministry on Thursday urged the United States to stop putting "extreme pressure" on the world's second-largest economy and demanded respect in any trade talks, but the two sides remained at an impasse over who should start those talks.

The Donald Trump administration has been ramping up pressure on China by raising import tariffs on Chinese goods in recent months. On Tuesday, the White House published a fact sheet stating that China now faces up to a 245% tariff.

The Chinese commerce ministry has criticised the tariffs as irrational and said Beijing will ignore the "meaningless" tariff numbers game. It has also warned that China will "fight to the end" if the US.insists on heaping substantial damage on China's rights and interests.

"The unilateral tariff increases were entirely initiated by the United States," He Yongqian, a Chinese commerce ministry spokesperson, told a weekly news conference.

Unlike a number of nations that have responded to Trump's "reciprocal tariffs" by seeking deals with Washington, Beijing has been upping its own levies on US goods in response and has not sought talks, which it says can only be conducted on the basis of mutual respect and equality.

Washington said on Tuesday that Trump was open to making a trade deal with China but Beijing should make the first move and that "the ball is in China's court".

"We urge the United States to immediately stop extreme pressure, coercion and blackmail, and resolve differences with China through equal dialogue on the basis of mutual respect," the commerce ministry spokesperson said.

The commerce ministry has been maintaining working-level communication with its US counterparts, she said, adding that China is open to economic and trade consultations with the United States.

But "the person who tied the bell must be the one who unties it," she said, using a Chinese proverb.

Source: Theedgemarkets

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Michelle

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Economic

China–U.S. Trade War

Trade barriers can come in many forms. Tariffs are just one. Onerous licensing requirements, export restrictions and fines on shipping are other obstacles.

Nvidia said Tuesday it would be taking a $5.5 billion charge related to canceled chip exports to China because of new licensing rules from the U.S. government. Beijing has retaliated to Trump tariffs by implementing export restrictions on rare earth elements and increasing antitrust scrutiny on U.S. firms. Donald Trump's administration has been floating the idea of imposing levies on Chinese-made containerships calling at U.S. ports.

Given those developments, the World Trade Organization warned on Wednesday that the outlook for global trade has "deteriorated sharply," and forecast a 0.2% decline in 2025. It's not mere fearmongering: Shipping vessels originating from China are already canceling their journeys.

Conditions in the stock market have likewise worsened. U.S. stocks fell Wednesday as export restrictions on Nvidia kept investors jittery. Trade — in all contexts — is getting hammered by the onslaught of U.S. President Donald Trump's tariffs.

What you need to know today

U.S. markets rocked by renewed trade jittersU.S. stocks slumped

Wednesday, hitting session lows after U.S. Federal Reserve Chair Jerome Powell's speech on inflation and tariffs. The S&P 500 lost 2.24% and the Dow Jones Industrial Average fell 1.73%. The Nasdaq Composite sank 3.07%, weighed down by heavy declines in chip stocks amid reports of new U.S. licensing requirements for Nvidia exports. The chipmaker's shares sank 6.9%.

Asian markets break from Wall Street

Asia-Pacific markets were mostly in the green Thursday. South Korea's Kospi added around 1% as the country's central bank expectedly held its benchmark interest rate at 2.75%. Japan's Nikkei 225 climbed roughly 1.2% even as the country reported a 3.9% rise in its exports in March, missing estimates and sharply lower the 11.4% jump in February.

Tension in dual mandate

Powell on Wednesday expressed concern that the central bank "may find ourselves in the challenging scenario in which our dual-mandate goals are in tension." The Fed aims to ensure stable prices and full employment. Economists, including those at the Fed, see threats to both goals from Trump tariffs, which are "likely to move us further away from our goals," Powell said in a question-and-answer session.

WTO warns of world trade disorganization

"The outlook for global trade has deteriorated sharply due to a surge in tariffs and trade policy uncertainty," the World Trade Organization warned in its latest "Global Trade Outlook and Statistics" report out Wednesday. Based on the tariffs currently in place, and including a 90-day suspension of "reciprocal tariffs," the volume of world merchandise trade is now expected to decline by 0.2% in 2025.

Freight ships from China canceling trips

U.S. importers are being notified of an increase in canceled sailings by freight ships out of China: A total of 80 blank, or canceled, sailings out of China have been recorded by freight company HLS Group. The impact of the diminished freight container traffic to North America will be significant for many links in the economy and supply chain, including the ports and logistics companies moving the freight.

TSMC earnings beat expectations

Taiwan Semiconductor Manufacturing Company reported Thursday first-quarter earnings that beat analyst expectations. The chip manufacturing company's net income increased 60.3% from a year ago to NT$361.56 billion ($11.1 billion), while net revenue in the March quarter rose 41.6% to NT$839.25 billion from the same period last year. Demand for artificial intelligence chips has boosted TSMC's fortunes, but Trump tariffs pose a threat to its future earnings.

[PRO] Still confident on dollar: Piper Sandler

The dollar index, which measures the greenback against a basket of major currencies, fell last week to its lowest point since April 2022 amid heightened uncertainty from Trump tariffs. More alarmingly, the U.S. dollar is typically viewed as a safe-haven asset in times of volatility, so its weakening has raised concerns. Piper Sandler, however, is still confident on the currency — here's why.

And finally...

China targets U.S. services and other areas as it decries ‘meaningless’ tariff hikes on goods

China last week announced it was done retaliating against U.S. President Donald Trump's tariffs, saying more increases by the U.S. would be a "joke," and Beijing would "ignore" them.

Instead of continuing to focus on tariffing goods, China has chosen to resort to other measures, including steps targeting the American services sector. Beijing has rolled out a series of non-tariff restrictive measures, such as widening export controls of rare-earth minerals and opening antitrust probes into American companies.

Additionally, China is seen by some as seeking to broaden the trade war to encompass services trade — which covers travel, legal, consulting and financial services — where the U.S. has been running a significant surplus with China for years.