Trump denied any intentions to dismiss the Federal Reserve's president.
"Here's the scoopstraight from the Oval Office," Donald Trump told reporters with a grin (as quoted by Reuters). "I ain't gonna boot him yet," he added, referring to his economic advisor. "I'd prefer him to ramp up his plan for lowering interest rates," the President continued.
Meanwhile, US stock futures soared, and the US dollar toughened, according to Bloomberg. For instance, the S&P 500 climbed an impressive 2.5% in a single day, while the Nasdaq 100 jumped by 2.63%.
While gold took a dip, almost dropping to $3,300 an ounce after hitting $3,500 the day prior, oil prices began to climb. In particular, June futures for Brent crude oil rose above $68 per barrel, and WTI for June delivery reached $64.7 per barrel. Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne, commented that oil experienced a boost thanks to the decline in cross-asset volatility and the prevention of a potential political blunder involving Trump's premature removal of Jerome Powell, the Fed chair (Bloomberg's words).
The market surge was also fueled by Trump hinting at potentially lower tariffs on China due to the ongoing trade deal between the nations. The President stated that this arrangement would result in "substantially" lower tariffs on Chinese goods, suggesting that the ultimate deal would not align with current tariff rates but would not be zero either.
On April 21, Trump took to his social media to call out the head of the Fed as a "big loser" and demand an immediate reduction in interest rates. This move was regarded as a potential threat to the Fed's independence, and it triggered a mass exit from US stocks, bonds, and the dollar. As a consequence, the US Dollar Index (DXY), which measures the US currency against six major currencies, plummeted to 97.923 on April 21 — its lowest level since March 2022. In contrast, gold spiked to $3,500 an ounce on April 22, setting a new record high.
The last Fed meeting took place on March 19. During that session, the Federal Open Market Committee kept borrowing costs within a range of 4.25% to 4.5%. The next rate decision meeting is scheduled for May.
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- The President, Donald Trump, expressed his preference for his economic advisor to intensify efforts in lowering interest rates.
- US stock futures soared, and the US dollar strengthened, potentially indicating a positive outlook in the finance sector.
- Oil prices started to climb, with Brent crude oil futures surpassing $68 per barrel and WTI reaching $64.7 per barrel, due to factors like decline in cross-asset volatility and possible political developments.
- The market surge could be attributed to Trump's hints at potentially lower tariffs on China and his advisor's plans for lower interest rates.
- Previous comments made by Trump, demanding an immediate reduction in interest rates, were seen as a potential threat to the Federal Reserve's independence, causing a mass exit from US stocks, bonds, and the dollar and resulting in the US Dollar Index (DXY) reaching its lowest level since March 2022.
