The White House has put Wall Street, Washington and the world through economic whiplash ever since Donald Trump announced its “Liberation Day” across-the-board tariffs.
Wednesday proved to be no different for the administration. In the Oval Office, the president slammed Federal Reserve Chairman Jerome Powell, whom he has assailed for not lowering interest rates.
“I haven’t called him, but I believe he’s making a mistake by not lowering interest rates,” he said. “He’s keeping rates too high.”
Trump nominated Powell to be the chairman during his first presidency and Powell became a favorite of Wall Street for his handling of the Covid-19 pandemic, but Trump disavowed him from the West Wing.
“He was recommended by a certain person that I’m not particularly happy with, but he will hopefully do the right thing,” he said.
Joe Biden re-nominated Powell, though Powell raised interest rates to curb inflation. But he earned high marks for accomplishing a “soft landing” of curbing inflation without causing an increase in unemployment.
Trump still sought to complain about Powell’s tenure under his predecessor.
“He historically has been late, except when it came to Biden,” he said.
Trump made the remarks in the Oval Office after the closing bell on Wall Street, but his latest seesaw on tariffs and trade suggests his administration cannot get its story straight.
Earlier in the day, Treasury Secretary Scott Bessent spoke at the Institute of International Finance, where he said that the administration hoped to build stronger relationships with allies.
Bessent, a founder of Key Square Group, delivered his address concurrent with the International Monetary Fund and the World Bank’s spring meetings.
“I wish to be clear: America first does not mean America alone,” he said. “To the contrary, it is a call for deeper collaboration and mutual respect among trade partners. Far from stepping back, America first seeks to expand US leadership and international institutions like the IMF.”
Bessent’s words sounded positively globalist. He even hinted at a willingness to work with China, which saw markets rally.
But during an earlier gaggle with reporters, Trump pulled the rug from under Wall Street.
“We’re going to make a lot of money for our people,” Trump told reporters. “We’ll be able to lower taxes substantially, and we’re going to be proud of ourselves. We’re not going to be a laughing stock that got taken advantage of by virtually every country in the world.”
During the gaggle in the Oval, a reporter asked Trump about how soon he could bring down the tariffs on China.
“Right now, it’s 145% that’s very high; it got there because of the fentanyl they’re sending,” Trump said. “But we’re going to make a lot of money, and that money is going to be used to reduce taxes.”
White House Press Secretary Karoline Leavitt parroted the president on Fox News.
“Let me be clear — there will be no unilateral reduction in tariffs against China,” she said. “The president has made it clear China needs to make a deal with the United States of America.”
Leavitt also said that 18 countries have offered proposals to make a trade agreement with the United States. While that sounds optimistic, the White House initially said it could seal 90 deals in 90 days when it announced a three-month pause on most tariffs.
It then said on Tuesday it could seal 75 deals in 90 days, all while only talking to 34 countries. To borrow from Trump, the tariff wall just got ten feet lower.
And Wall Street is already feeling the heat. The dollar plunged to a three-year low earlier this week thanks to Trump’s constant sniping at Powell.
Trump’s inability to get his story straight on trade is partially why the Dow Jones Industrial Average is headed for its worst April since the Great Depression. As of Wednesday evening, futures for the Dow and the S&P plunged almost as soon as Trump began to talk.
Trump’s tariffs might upset the tummy of Wall Street. But it is the inconsistency that will give investors heartburn.