The president of the United States, Donald Trump, retreated his threat to fire the head of the United States Federal Reserve, after his sides against the head of the Central Bank caused a puncture in the stock market and the dollar.
Trump’s comments on Tuesday seemed to rule out any imminent plan to eliminate the president of the Federal Reserve, Jerome Powell, whom the president of the United States has repeatedly criticized for not moving faster to lower interest rates.
“The press escapes with things. I have no intention of saying goodbye,” Trump told White House journalists.
“I would like to see it a little more active in terms of your idea to reduce interest rates. This is the perfect time to merge interest rates. If you don’t, it’s the end? No, it’s not.”
Futures of the United States shares, which are negotiated or regular in the market, increased after Trump’s comments, with contracts linked to S&P 500 reference and Tech-Heavy-100 increasing more than 1.70 percent and 1.90 percent, respectively.
The US dollar increased more than 1 percent compared to the main currencies.
Wall Street recovered earlier on Tuesday after the United States Treasury Secretary Scott Besent told an investor conference that a commercial war with China was “unsustainable” and expected the parties to decrease the tensions and reach an agreement at some point.
After Bessert’s comments, the White House Secretary, Karoline Leavitt, said the Trump administration was “preparing the stage for an agreement with China” and “very good” to move towards an agreement.
The S&P 500 closed more than 2.5 percent, while Nasdaq finished more than 2.7 percent higher.
Asian markets opened more on Wednesday, with Nikkei 225 from Japan and Kospi from South Korea increased approximately 2 percent and 1 percent, respectively, in early trade.
The United States and China are locked in an effective commercial embargo after Trump imposed a 145 percent tariff on most Chinese products, and China gave an impulse of 125 percent in US exports in reprisals.
Trump recognized on Tuesday that the Chinese rate was “very high” and said the “substantial” decrease rate.
Repeated Trump attacks against Powell have baffled financial markets in the light of excessive economic consensus that the independence of the Federal Reserve is crucial for the health of the US economy.
Wall Street suffered some of his greatest losses of the year on Monday after Trump described Powell as an “important loser” and “MR TOO LATE” for not going back the cuts to the reference interest rate, which influences the costs of loans to the economy.
Trump’s comments occurred after last week declared that Powell’s termination “cannot be quick enough” and that his main economic advisor, Kevin Hasett, said the administration was studying the possibility of its elimination.
The Federal Reserve, which reduced the last reference rate in December, has expressed caution on reducing the costs of loans in the short term amid the concerns that Trump’s radical tariffs fell inflation.
Trump has ruled out Conerns that his commercial war will lead to higher prices, unlike the opinions of most economists, and argued that the cautious position of the Central Bank runs the risk of slowing down the economy.
Powell, who was nominated by Trump in 2017 and took the opportunity to fulfill another four -year mandate by the former president of the United States, Joe Biden, said he would not resign if he is requested and declared that he can only be dismissed for embezzlement.
The heads of independent federal agencies, such as the Federal Reserve, can only be eliminated by “cause” under legal precedents established by the Supreme Court of the United States, thought that the Trump administration is a challenge in court in laboratory labor relations relations systems.
Any movement to eliminate Powell before the end of his mandate would probably send shock waves through financial markets given the long expectation that the Federal Reserve should make their decisions free from political considerations.
“I would expect to see a dramatic fall in the markets and bond markets,” Al Jazeera, Erasmus Kersting, professor of Economics at the University of Villanova in Villanova, Pennsylvania, told Al Villanova.
“The ‘Sell USA’ strategy would become the main current. This would also have an impact on the real economy, which leads to a recession.”