The Federal Reserve has warned it “would absolutely be prepared” to use its firepower to stabilise financial markets if the conditions were to worsen due to Donald Trump's "reciprocal" tariffs on dozens of nations.
Mr Trump sent financial markets into a tailspin by announcing sweeping import taxes on dozens of trade partners last week, before rolling them back to 10 per cent last Wednesday for 90 days.
Susan Collins, president of the Boston Fed, said: “Markets are continuing to function well, and we’re not seeing liquidity concerns overall". However, she added that the central bank “does have tools to address concerns about market functioning or liquidity should they arise”.
She told The Financial Times: “We have had to deploy various tools quite quickly in the past. We would absolutely be prepared to do that as needed.”
Meanwhile, Mr Trump alleged that his tariff policy was “doing really well” after China hiked duties on American goods to 125 per cent in a tit-for-tak response against the American president’s levies of 145 per cent on Chinese goods.
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Key points
- US central bank threatens to step in to stabilise market
- Trump says tariff policy 'doing very well'
- Trump says there could be exceptions to 10% baseline tariff
- Trump’s approval ratings take a beating amid the trade war
China will 'ignore' further duty by Trump
07:51
,
Alisha Rahaman Sarkar
China has said it will ignore further levies by US president Donald Trump after Beijing hiked levies on American goods to 125 per cent.
"Even if the US imposes higher tariffs, it would no longer make economic sense and ultimately go down as a joke in world economic history," China's finance ministry said yesterday.
"Given that it's already impossible for the Chinese market to accept US imports at the current tariff level if the United States imposes further tariffs on Chinese products, China will ignore it," it said.
Trump’s approval ratings take a beating amid the trade war
07:04
,
Alisha Rahaman Sarkar
President Donald Trump had perhaps one of the biggest setbacks for his agenda this week. After a whipsaw performance in overnight markets on Tuesday evening, Trump blinked and announced a 90-day pause on his “reciprocal tariffs.”
Trump himself admitted this came after markets got “a little queasy.” It also came after JPMorgan Chase CEO Jamie Dimon, arguably the most respected executive on Wall Street, warned that a recession was likely. It turns out that even as the Republican Congress and the courts largely stand by, one thing can grind Trump to a halt: the bond market, which went haywire on Tuesday evening.
But Trump did not just make Wall Street sick. The University of Michigan’s survey of consumers found that consumer sentiment dropped for the fourth straight month in a row, 30 percent since December 2024.
And this does not erase the fact that Trump still slapped on 145 percent duties on China and an across-the-board tariff of 10 percent for other countries.
Democrats call for insider trading investigation
06:59
,
Alisha Rahaman Sarkar
Senior Senate Democrats have written a letter asking the Securities and Exchange Commission (SEC) to investigate whether president Donald Trump engaged in insider trading and market manipulation.
Mr Trump sent financial markets into a tailspin by announcing sweeping import taxes on dozens of trade partners last week, before rolling them back to 10 per cent last Wednesday for 90 days.
The call for investigation was prompted by Mr Trump's statement on Wednesday when he claimed that it was a “great time to buy” stocks. Shortly after, he paused most of the tariffs imposed last week.
“We urge the SEC to investigate whether the tariff announcements, which caused the market crash and subsequent partial recovery, enriched administration insiders and friends at the expense of the American public and whether any insiders, including the president’s family, had prior knowledge of the tariff pause that they abused to make stock trades ahead of the president’s announcement,” said the letter.
House minority Leader Hakeem Jeffries said earlier that Democrats "need to get to the bottom of the possible stock manipulation that is unfolding before the American people, including what if any advanced knowledge did members of the House Republican Conference have of Trump’s decision to pause the reckless tariffs that he put into place?"
"There are several members of Congress who will be aggressively demanding answers and transparency, particularly as it relates to the stock purchase decisions that may have occurred over the last few days."
US central bank threatens to step in to stabilise market
06:56
,
Alisha Rahaman Sarkar
The Federal Reserve has warned it “would absolutely be prepared” to use its firepower to stabilise financial markets if the conditions were to worsen due to Donald Trump's "reciprocal" tariffs on dozens of nations.
Mr Trump sent financial markets into a tailspin by announcing sweeping import taxes on dozens of trade partners last week, before rolling them back to 10 per cent last Wednesday for 90 days.
Susan Collins, president of the Boston Fed, said: “Markets are continuing to function well, and we’re not seeing liquidity concerns overall". However, she added that the central bank “does have tools to address concerns about market functioning or liquidity should they arise”.
She told The Financial Times: “We have had to deploy various tools quite quickly in the past. We would absolutely be prepared to do that as needed.”
Trump says there could be exceptions to 10% baseline tariff
06:16
,
Alisha Rahaman Sarkar
US president Donald Trump yesterday said that 10 per cent is a tariff floor, or pretty close, and that there could be a couple of exceptions.
Mr Trump, who said he was comfortable with the tariffs on China, has suggested that a deal with Beijing could be in the offing, too, heaping praise on president Xi Jinping despite their differences over trade.
But there were no signs that the world's two largest economies were ready to back down.
"The president made it very clear: When the United States is punched, he will punch back harder," White House press secretary Karoline Leavitt told reporters.
Xi asks EU to jointly oppose 'unilateral acts of bullying'
06:13
,
Alisha Rahaman Sarkar
President Xi Jinping told Spain's prime minister that China and the EU must join together in defending globalisation and opposing "unilateral acts of bullying", in a jab at US president Donald Trump.
Mr Xi, in his first public comments on the issue since Mr Trump launched his tariff offensive last week, said there could be "no winners" in any trade war, and he said the EU had a key role to play in ensuring global economic stability.
China has always regarded the EU as an important pole in a multipolar world, and is one of the major countries firmly supporting the EU's unity and growth," Mr Xi told the Spanish prime minister.
"China and the EU should fulfill their international responsibilities, jointly safeguard the trend of economic globalisation and the international trade environment, and jointly oppose unilateral acts of bullying," Xi added.
Trump says tariff policy 'doing very well'
05:35
,
Alisha Rahaman Sarkar
US president Donald Trump has insisted that his policy was “doing really well” despite China hiking levies on American goods to 125 per cent in a tit-for-tat response amid the ongoing trade war between the two biggest economies.
China’s tariff hike, hitting back against Trump's decision to hike duties on Chinese goods to 145 per cent, will come into effect today.
"When people understand what we're doing, I think the dollar will go way up," he told reporters, downplaying the market turbulence."The bond market's going good. It had a little moment but I solved that problem very quickly."
