President Donald Trump confirmed he has no intention of removing Federal Reserve Chairman Jerome Powell from his role, despite past public criticism. Trump also signaled a more open approach to ongoing trade discussions with China, indicating that progress remains possible and that tariffs could ease if a deal is reached.

The remarks came during a press briefing at the Oval Office, where Trump stressed the need for the Federal Reserve to take bolder action to support the U.S. economy. He urged Powell to push interest rates lower in the coming months.

Trump Urges Fed to Act as Inflation Fears Grow

Trump made clear he believes Powell should be more aggressive with monetary policy. “I want to see stronger rate cuts,” Trump said. “The economy needs it.”

Although the former president has previously called Powell “a major loser,” he now says he won’t try to fire the Fed chief. Powell was appointed by Trump in 2017 and reappointed by President Joe Biden in 2021.

Trump’s comments come at a time when markets are watching Fed decisions closely. With inflation already high and interest rates near peak levels, some investors worry that further political pressure could disrupt the Fed’s independence.

Optimism on China Talks Despite Tariff Pressure

Trump also struck a more hopeful tone on U.S.-China trade talks. He said he believes the two nations could reach a new agreement soon and that he would negotiate “nicely” with Beijing.

He clarified, however, that existing tariffs would not be removed entirely. “We’re not going to zero, but we could cut some tariffs if things go well,” he added.

U.S. Treasury Secretary Scott Bessent echoed the sentiment, calling the current trade situation “unsustainable.” He said both sides need to work toward a deal that brings stability to global markets.

Stock Markets Rally as Investors React

The financial world responded quickly. On Tuesday, U.S. stock indexes jumped. The S&P 500 rose by 2.5%, while the tech-heavy Nasdaq gained 2.7%. Overnight futures also pointed to further gains.

Asian markets reacted positively on Wednesday. Japan’s Nikkei 225 increased by 1.9%. Hong Kong’s Hang Seng climbed by 2.2%. Only Shanghai’s Composite Index slipped slightly, down by less than 0.1%.

Market analysts say the rebound reflects renewed hope that interest rates might fall and that trade tensions with China may ease.

IMF Issues Warning Amid Global Slowdown

Despite recent optimism, the International Monetary Fund (IMF) warned that the U.S. economy faces major risks. It downgraded its 2025 growth forecast for the U.S. more than any other advanced economy.

According to the IMF, trade disputes and high tariffs are the main reasons for the weaker outlook. The organization said continued uncertainty could slow global growth sharply.

Trump’s administration has imposed tariffs as high as 145% on some Chinese goods. In some cases, total duties on imports could reach 245%. China has responded with tariffs of up to 125% on American exports.

Experts Say Tariffs Hurt Both Sides

While Chinese officials have yet to make an official statement, local media have weighed in. A state-run newspaper quoted economists who said the U.S. may now see that tariffs are causing more harm at home than abroad.

“The real impact is on American businesses and consumers,” one analyst said. “Beijing is watching, but Washington is feeling the pressure.”

Trade Talks and Economic Stability

As the global economy faces rising uncertainty, leaders in both Washington and Beijing are under pressure to reach an agreement. Businesses and investors are hoping for clarity on future tariffs and interest rate policies.

Meanwhile, Trump’s comments suggest a shift in tone—less confrontational and more focused on cooperation. Whether this will lead to concrete results remains to be seen.