Softening

Financial markets are relieved by the announcement of Trump he had no intention of firing Federal Reserve Chair Jerome Powell with equity and bond markets up and the USD strengthening. “Never did,” Trump said. “The press runs away with things. No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates.” On top, Trump said he plans to be “very nice” to China in any trade talks and that tariffs will drop if the two countries can reach a deal, a sign he may be backing down from his tough stance on Beijing. This follows statements from his Treasury Secretary Bessent yesterday and ongoing trade negotiations with India.

The recent volatility in financial markets have clearly shown the limits of the influence of the Trump 2.0 administration. At ECP, we reiterate our stance that the current uncertainty has been caused by the alchimists in Washington and therefore can also been undone by the same people. This is apparently starting to happen but irreparable damage to the US exceptionalism was done while the debt and deficit issues of the US are far from solved.