Link Securities | Speaking to reporters, US President Donald Trump said he never intended to fire Federal Reserve Chairman Jerome Powell, saying it was “media fabrications”. Trump repeated his criticism of Powell and said he would like Powell to be more active in lowering interest rates, but even if he did not, it would not have to mean his dismissal. Concerns about this possible dismissal were heightened by comments from National Economic Council (NEC) director Kevin Hassett on Friday that Trump’s team was considering the possibility of Powell’s dismissal.
In other news, in the same remarks. Trump signalled that tariffs imposed on imports from China would be substantially reduced if the two sides reach an agreement. Even if tariffs are not reduced to zero, Trump said he would be “good” with the Chinese government and sees no need to employ aggressive tactics. Trump expressed similar sentiments last week, when he announced his confidence in reaching a trade deal with China.
In addition, these statements came after others made yesterday by the Secretary of the Treasury, Scott Bessent, in which he anticipated that there will be an agreement between the two countries in the near future. In these statements, Bessent indicated that the situation of escalating tariffs with China was unsustainable, and anticipated a de-escalation, adding that the goal was not total disengagement. At the same time, Bessent stated that negotiations with China could prove difficult, while Trump warned that he would set the terms of the agreement if there is no consensus with the Chinese government. However, although China has expressed its willingness to negotiate on mutually respectful terms, a person familiar with the Chinese government’s thinking recently said that China wants the US to speak out on its concerns about sanctions and Taiwan. He also showed the Beijing government’s reluctance to accelerate high-level negotiations, preferring them to be conducted by lower-level officials, before any calls between Trump and Xi Jinping.
