Dollar Gains: Trump Supports Powell, Delays Tariffs

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dateline: Washington D.C. – may 14, 2024

• Trump expressed confidence in Powell’s handling of monetary policy.
• The former president delayed tariffs on several key minerals, citing national security concerns.
• The dollar index rose following the announcements, signaling increased investor confidence.
• The move suggests a potential softening in Trump’s trade stance.

The dollar’s strength, while modest, represents a notable change in sentiment. What impact will Trump’s evolving economic policies have on the U.S. dollar and global trade? The answer, for now, seems to be a temporary calming of nerves, at least in the short term. Trump’s comments came during a speech at a manufacturing conference in Ohio.

Powell Receives Unexpected Praise

For months, Trump has been openly critical of powell and the Federal Reserve’s interest rate policies, blaming them for hindering economic growth. Though, on Tuesday, he offered a starkly different assessment, stating he believes Powell is “doing a very good job” and that the economy is “stronger than people think.” This unexpected endorsement caught many analysts off guard.

Did you know? Trump previously called Powell “an enemy of the United States” in 2023.

Tariffs Put on Hold

Adding to the market’s surprise, Trump announced a delay in implementing tariffs on several minerals, including graphite, used in electric vehicle batteries. The tariffs, initially proposed to protect domestic industries, were postponed due to concerns about their potential impact on national security and the electric vehicle supply chain. He stated the delay would allow for further review and negotiation with trading partners.

market Reaction and Future Outlook

The dollar index, which measures the dollar’s value against a basket of major currencies, rose 0.3% following the announcements. Stock markets also saw a modest bump, with the Dow Jones Industrial Average gaining over 100 points. Though, analysts caution that the market’s reaction coudl be short-lived, depending on future developments. The long-term implications of trump’s shifting policies remain uncertain.

“This is a classic case of ‘don’t fight the Fed…or the former president,'” quipped one Wall Street trader, speaking on condition of anonymity. “The market is reacting to the