Trump Weighs Power To Fire Fed Chair Powell

Speaking to reporters, White House National Economic Council Director Kevin Hassett said Trump was studying whether firing Powell was an option.

Fed independence at risk? Trump reportedly planning to fire Powell

According to media reports citing sources, US President Trump has been privately discussing the possibility of replacing Federal Reserve Chairman Powell for months, but he has not yet made a final decision on this.

Powell, 72, is a Republican who was nominated by Trump as Fed chairman during his first term. Powell won the trust of the previous US President Biden and was able to get a second term as Fed chairman in 2022. His term will end in May next year.

As early as Trump's first term as US President (2017-2021), he and Powell disagreed. Trump repeatedly asked Powell to cut interest rates, while the latter insisted on maintaining the independence of the Federal Reserve.

After Trump started his second term, the conflict between him and Powell has intensified. While launching radical trade policies, Trump continued to pressure Powell to cut interest rates, but Powell remained unmoved.

People familiar with the matter revealed that in several meetings at his private estate in Florida, Mar-a-Lago, Trump and former Federal Reserve Governor Kevin Walsh discussed the possibility of firing Powell before the end of his term and may consider Walsh to take over as Fed chairman.

Walsh is understood to have dissuaded Trump from firing Powell, arguing that he should be allowed to complete his term and that the Fed's independence should not be interfered with. The conversation with Walsh continued into February of this year, and other advisers to Trump even discussed firing Powell with him in early March.

As early as 2017, Trump considered Walsh as the chairman of the Federal Reserve before choosing Powell, who officially took office the following year.

Trump team divided

In a meeting in the Oval Office of the White House on Thursday, Trump said he believed he had the power to fire Powell.

"If I wanted him out, he'd be out in a heartbeat, believe me," Trump said.

He added that he was unhappy with Powell and accused him of playing politics on interest rates.

If Trump does try to fire Powell, the matter would almost certainly be appealed to the Supreme Court, a move that would not only put pressure on Powell's successor but could also roil markets as they worry about the precedent of a Fed chair being removed over policy differences.

Trump's advisers are divided over whether to take action, and it is unclear whether Trump will actually do so.

Inside the White House, Treasury Secretary Jeff Bessant has long opposed the idea of ​​replacing Powell, arguing that the move is extremely risky and offers little benefit. He said this week that the Fed's independence in monetary policy is a "treasure that can never be destroyed" in the United States.

Some advisers, however, have advocated for a more direct challenge to Powell, arguing that the Fed and its backers in Washington and on Wall Street have overly glorified the institution’s independence, an independence that has no constitutional backing and is not conducive to economic development.

Trump has trouble firing Powell

There is no legal precedent as to whether the president has the power to fire the Fed chairman before the end of his term.

Trump has previously admitted that the law is not clear on this. He said in October 2023: "I wanted to fire him (Powell) at the time (referring to the first term), but the question is whether you really have the power to do so."

Powell made it clear six years ago that if his position was challenged, he would fight through legal means, and his recent public statements show that this position has not changed.

The top Fed officials had prepared for this: once Powell's position as chairman of the Federal Reserve is challenged, the Federal Open Market Committee (FOMC), the independent body responsible for setting interest rates at the Fed, will immediately hold a meeting to re-elect Powell as chairman of the committee.

Source: Cailianshe

WASHINGTON (April 18): US President Donald Trump and Italian Prime Minister Giorgia Meloni each expressed confidence on Thursday that the US and Europe will be able to negotiate a trade deal before his 90-day pause on some tariffs ends.

The 27-nation European Union (EU) faces 25% import tariffs on steel, aluminium and cars, and broader tariffs on almost all other goods under Trump's policy to hit countries he says impose high barriers to US imports.

Trump said he was 100% certain of an eventual trade deal with Europe, the most confidence he has expressed on those negotiations since rattling world markets with his tariff announcements.

"Of course there will be a trade deal, very much. They want to make one very much. And we are going to make a trade deal. I fully expect it. And it will be a fair deal," Trump told reporters in the Oval Office after talks with Meloni, a close ally.

Meloni, positioning herself as an intermediary between the US and Europe, was equally confident.

She noted, however, that she could not lock in a deal for the full EU but said frank discussions could help resolve trade disputes that have strained US-European ties.

"I am sure we can make a deal, and I am here to help with that," she said.

Trump has offered to make trade deals with as many nations as possible to limit the impact of the tariffs. Asked about what countries were on his priority list, he said, “Everybody is on my priority list.” He also said he expected to make a trade deal with China.

While Trump is cool to many European leaders, he and Meloni, a 48-year-old conservative, have bonded. She was the only EU leader invited to Trump's inauguration in January, and he praised her leadership during their visit on Thursday.

"Our relationship is great," Trump said.

After a lunch meeting, Trump and Meloni sat side by side in the Oval Office and fielded questions during a lengthy session.

They both talked up their tough stances against diversity and inclusion policies, as well as migration. Meloni, who will host Vice President JD Vance in Rome on Friday, said Trump had accepted her invitation to visit Italy in the near future.

Trump enjoyed Meloni's long answer in Italian to a question that he declared "that was so beautiful" and insisted on hearing the translation.

Trump's move to pause most global tariffs for 90 days last week eased some pressure on Meloni's visit.

She is walking a tightrope between her ideological affinity with the president and her ties with European allies, who have criticized Trump's tariff hikes and his decision to exclude the EU from talks with Russia to end the war in Ukraine.

Meloni is facing pressure at home to protect Italy's export-driven economy, which last year ran a €40 billion (US$45.4 billion or RM200.77 billion) trade surplus with the US.

But she must also be seen as defending the interests of the whole 27-nation EU bloc.

Meloni told reporters she expected Italy would announce at the next Nato meeting in June that her country would be able to reach the alliance requirement that each member nation spend 2% of gross domestic product on defence spending.

Highly indebted Italy's projected defence budget for 2024 was 1.49% of gross domestic product, Nato figures showed, below the military alliance's current 2% target that Trump wants raised to 5%.

Source: Theedgemarkets

(April 18): US President Donald Trump said the US and Ukraine would sign a deal on critical minerals next Thursday, in a step expected to keep Kyiv in good favour, as the White House seeks to broker a quick ceasefire deal with Russia.

“We have a minerals deal which I guess is going to be signed on Thursday,” Trump said while meeting with Italian Prime Minster Giorgia Meloni in the Oval Office. “And I assume they are going to live up to the deal.”

The announcement puts the agreement — which fell through after Ukrainian President Volodymyr Zelenskiy clashed with Trump and Vice President JD Vance in the Oval Office — back on track, and suggests both sides have agreed to the contours of the accord governing postwar plans to exploit the country’s mineral deposits and rebuild its infrastructure.

The agreement comes as Trump has vacillated between blaming Moscow and Kyiv for failing to end the war that began with Russia’s full-scale invasion of Ukraine in 2022. Trump has demanded a joint US-Ukraine development deal as compensation for the weapons and other aid the US provided under his predecessor, Joe Biden.

Earlier this months Ukraine and US have conducted technical discussions on the deal and agreed to sign transitional memorandum of intent, fixing the positive steps, made by the parties. The document was signed online late on Thursday, clearing the way “for an Economic Partnership Agreement and the establishment of the Investment Fund for the Reconstruction of Ukraine”, Ukraine’s Vice Prime-Minister Yulia Svyrydenko said in a post on X.

“This document is the result of the professional work of the negotiating teams, which recently completed another round of technical discussions in Washington,” Svyrydenko added.

The partnership accord would grant the US first claim on profits transferred into a special reconstruction investment fund that would be controlled by Washington. In negotiations, Kyiv has pressed for better terms and refused to recognise the past US assistance as debt.

Following a round of negotiations in Washington, the Trump administration reduced its estimate for the assistance the US provided to Kyiv since the start of Russia’s full-scale invasion from US$300 billion (RM1.32 trillion) to about US$100 billion, according to people familiar with the matter. This bring it closer to Ukraine’s own estimate of more than US$90 billion.

Trump backtracked from recent comments in which he said Zelenskiy was to blame for the war in Ukraine — while still lobbing criticism at the Ukrainian leader.

“I don’t hold Zelenskiy responsible but I’m not exactly thrilled with the fact that war started,” Trump said. He added that he was not happy with Zelenskiy because of the bloody toll of the war.

“I wouldn’t say he’s done the greatest job,” he said. “I am not a fan.”

Still, Trump said, his attention was on getting Russian leader Vladimir Putin to agree to end the fighting.

“I’m trying to get him to stop, because as you know, Russia’s a lot bigger,” Trump said.

Source: Theedgemarkets

AUDUSD is trading near its yearly high at 0.6408, continuing a strong uptrend. Further gains are likely. Full analysis for 18 April 2025 below.

AUDUSD forecast: key trading points

• AUDUSD is approaching its 2025 high at 0.6408
• Current trend: upward
• AUDUSD forecast for 18 April 2025: 0.6408 and 0.6330

Fundamental analysis

AUDUSD has gained steadily over the past two weeks, nearing the yearly high of 0.6408. The rally is supported by broad US dollar weakness and the strong performance of gold — a key Australian export.

Federal Reserve Chair Jerome Powell recently reiterated that the Fed will not rush to cut interest rates until there is greater clarity on the US economic outlook.

At the same time, the introduction of new tariffs by President Donald Trump’s administration has added pressure on the dollar. According to Powell, these measures may intensify inflationary risks while weighing on US economic growth — both factors favouring commodity-linked currencies like the Aussie.

AUDUSD technical analysis

AUDUSD is advancing within a clear bullish trend and is currently trading just below 0.6400. The Alligator indicator confirms the strength of the upward impulse.

In the short term, if buyers maintain momentum, a breakout above the yearly high at 0.6408 is possible. Should sellers regain control, a pullback toward the 0.6330–0.6300 support zone may follow.

Summary

AUDUSD remains firmly in an uptrend, supported by USD weakness and strong commodity prices. A near-term test of the 0.6408 yearly high is likely. Today’s forecast for 18 April 2025 points to a possible breakout, while key support lies in the 0.6300–0.6330 range.

Source: RoboForex

China is widely expected to leave its benchmark lending rates unchanged at the monthly fixing on Monday, a Reuters survey showed, but markets are wagering on more stimulus being rolled out soon in the face of an escalating Sino-U.S. trade war.

Policymakers have to walk a tight rope as the yuan has come under pressure after U.S. President Donald Trump's tariff onslaught, while shrinking interest margins at lenders has continued to limit the scope for monetary easing.

The loan prime rate (LPR), normally charged to banks' best clients, is calculated each month after 20 designated commercial banks submit proposed rates to the People's Bank of China (PBOC).

In a Reuters survey of 31 market watchers conducted this week, 27, or 87% of all respondents expected both the one-year and five-year LPRs to remain steady, while the remaining four participants projected a reduction of 10 to 15 basis points to the five-year rate.

Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages.

China last cut its policy rate in September and benchmark LPRs in October.

"I don't think there will be a LPR cut (this month)," said a trader at a wealth management firm.

"They will need to lower the deposit rates first."

A reduction to the banks' deposit rates could alleviate net interest margin pressure at lenders and allow them to lower lending rates.

China's gross domestic product (GDP) grew 5.4% in the first quarter, beating expectations, but markets fear a sharp downturn in the year ahead as U.S. tariff policies pose the biggest risk to the Asian powerhouse in decades.

Indeed, export data was yet to capture the impact from higher tariffs as many factories front-loaded their orders to beat the duties, analysts said.

Trump has raised tariffs on Chinese goods to a massive 145%, prompting Beijing to retaliate with higher 125% duties on U.S. goods in a tit-for-tat trade war that has roiled investors.

Market participants still expect some monetary easing measures in coming months to support the broad economy and cushion the impact of U.S. tariffs.

Any moves to boost stimulus, however, will require policymakers consider the impact on the yuan, which is down 0.4% against the dollar since Trump's April 2 announcement of global tariffs.

"To bolster domestic financial and property markets while promoting yuan internationalization, Beijing most likely won't allow a sharp yuan depreciation against the dollar," said Ting Lu, chief China economist at Nomura.

Source: Yahoo Finance

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