The retreat of the Asian stock index, while the stock futures for U.S. stocks rose slightly, indicating that the 500 500 index fell by more than 2%, and stocks could rebound. After weakening the 15-month low, a large amount of green backs stabilized in early trading. Gold jumped to another record of safe haven demand.
Trump’s assurances that tariff negotiations are ongoing have barely made optimism as he may be prepared to fire Powell’s concerns about refusing to lower interest rates faster. Wall Street sentiment has shifted from optimism to a “selling America” model, which Trump has disrupted the global trade order by raising tariffs to the highest level in a century, and economists say such a move will boost inflation and push the United States to recession.
“As Trump’s policy turmoil may undermine the global economic order, the crisis of confidence in the U.S. market is deepening,” wrote Kyle Rodda, senior market analyst at Capital.com.
The president participated in the Monday of truth socializing, increasing pressure on the Fed chairman, insisting that there was “actually” no inflation and that it was time to “preemptively”. The final reading of the Fed’s preferred inflation scale is still above the central bank’s target, with new readings coming next week.
National Economic Commission Director Kevin Hassett said Friday that Trump is studying whether he can fire Powell. These comments raise new questions about whether the Fed can maintain its long-term independence as the president increasingly vents his dissatisfaction that central banks are not cutting interest rates faster. “If Powell was to be fired, the initial reaction would be a lot of volatile to financial markets and the most dramatic exit from U.S. assets can be imagined,” said Michael Brown, senior research strategist at Pepperstone. “Not only is the Fed’s independence clearly threatened, but the prospect of losing money and leaving our hegemony is increasingly realistic.” Trump opposes reevaluating the basic assets of the U.S. economic advantage. During stress, the dollar and Treasury bonds (traditional havens) suddenly look less attractive.
Hedge Foundation elites also expressed concerns. Paul Singer, founder of Elliott Investment Management, warned recently at a private event in Abu Dhabi that the dollar could lose its reserve currency status.
Meanwhile, Japanese Bank officials believe that despite the uncertainty caused by U.S. tariffs, there is little need to change its existing stance on gradually increasing interest rates.
