Federal reserve building Marriner S. Eccles in Washington, USA, February 27, 2024.
Morah Ratner Bloomberg Getty images
An independent central bank is seen by the majority (including this newsletter) as the basis of functional economy. Officials manage the economy, calibrating the interest rate on which bank loans and mortgage loans are based.
Corporations and consumers, in general, like low interest rates, because the cost of loans is cheaper. The first one is encouraged to expand and invest, which in turn tends to increase income and expenses between the latter. But such behavior can overheat the economy, causing prices to rise.
Repeated calls of US President Donald Trump to the chairman of the Federal Reserve Jerome Powell to lower interest rates can make companies and people happy – at the expense of allowing inflationary madness. Impact on the Trump tariffs, which are import taxes, and thus fundamentally an increase in prices, and inflation can get two shots in the shoulder.
That is why central bankers operate independently of the government. The administration, which aims to satisfy the population, may reduce the rates despite high inflation, which leads to further economic difficulties.
It is aid markets in the USA, and Europe was on a holiday break on Good Friday, when Trump commented.
What you need to know today
Trump calls Powell again to lower the rates
US President Donald Trump said on Friday that “if we had the chairman of the FED, who understood what he was doing, Interest rates would fallToo. “The White House said on Friday that officials assess whether they can Remove the Fed chair. This is Not the first time Trump criticized Powell's approach to American monetary policy.
Growing disapproval for Trump's economy
According to the CNBC survey among 1000 Americans, 55% of respondents rejected From the service of the economy by Trump, for the first time in every CNBC survey, which was negative about the economy during the president. According to the results of the survey, more Americans now believe that the economy will be worse than at any time from 2023 and are more pessimistic in terms of stock exchange.
China keeps interest rates stable
The markets of Asia and the Pacific were mixed on Monday. Japan Nikkei 225 lost about 1.3%. However, CSI 300 in continental China added about 0.3% as a folk bank he maintained unchanged loan rates. 1-year-old LPR is currently 3.1%and the 5-year rate is 3.6%. Economists surveyed by Reuters expected this result, which suggests that PBOC priority treats Juan's stability over the stimulation of the economy.
Beijing vow “mutual remedies”
Chinese Ministry of Trade warned On Monday, that Beijing strongly objects to each page containing the contract at the expense of China's interests. If this happens, China will not accept him and will definitely take mutual remedies, “in accordance with the translation of CNBC. Trump administration is Apparently, he plans to use tariff negotiations to exert pressure on American partners limit your contacts with China.
Economic activity in the USA may “fall” in the summer
The US economy can experience Increased level of activity now When buyers and companies buy the goods before the start of the tariffs, Chicago President Fed Austan Goolsbee said on Sunday. “Activity may look artificial high in the initial place, and then in the summer it can fall – because people bought everything.” Goolsbee said that the sectors of the automotive industry and electric components are most affected.
Executive prohibition to review the State Department
The Trump administration may soon move in Huge changes in the US Department of StatePursuant to the 16-page draft executive ordinance obtained by CNBC. If it is adopted, the Order would illuminate the American embassies in South Africa, eliminated offices that act on such issues as democracy and human rights, as well as international organizations such as the UN.
(Pro) earnings can displace tariffs as a focus
According to strategists, market sites due to Trump tariffs can be subdued – but not quite inferior -. Investors' attention will pay off Earning reports in the first quarterWith Tesla AND Alphabet By announcing their performance on Tuesday and Thursday, respectively.
And finally …
US President Donald Trump meets with the prime minister of Japan Shiger IShiba in the White House in Washington, USA, February 7, 2025.
Kent Nishimura Reuters
Trump's tariffs force Asian trading partners to consider investing in the huge energy project Alaska
Alaska has long been trying to build an 800-kilometer pipeline that would eventually cool gas in liquid for exports to Asia. The project, which has a stunning price, which will reach $ 40 billion, has been stuck on the drawing board for years.
Alaska LNG, As the project is known, it shows new signs of life – with Trump advertising the project as a national priority. The Secretary of the US Treasury, Scott Bessent, said at the beginning of this month that the project consistent with natural gas can play an important role in commercial negotiations with South Korea, Japan and Taiwan.
“We are thinking about a large LNG project in Alaska that South Korea, Japan (I) Taiwan is interested in financing and making a significant part of deprivation,” Bessent told journalists on April 9, saying that such an agreement will help to achieve Trump's goal of reducing the trade deficit in the USA.