US media revealed the inside story of Trump's tariff suspension, and Powell was violently bombarded!

Trump increased criticism of Federal Reserve Chairman Powell on social media on Monday, calling him a "big loser" and demanding an immediate rate cut.

White House economic adviser Kevin Hassett said last Friday that the president and his team are still studying whether they can fire Powell. Just the day before, Trump said Powell's "replacement is too slow" and called for a rate cut again. Vishnu Varathan, head of economic research at Misui Bank Asia (excluding Japan), said: "Powell is not directly responsible for Trump, so Trump cannot actually fire him directly. He can only be removed under specific procedures, and the threshold is relatively high. But can the president destroy the independence of the Federal Reserve through political pressure? Of course." Varathan said that from the high uncertainty caused by the self-damage of tariff policies to the market's confidence in the US dollar has been shaken before the Powell incident.

Brown Brothers Harrim An&Co.) WinThin, head of global market strategy, wrote in a report: "We believe the dollar will continue to weaken. Attacks on the independence of the Federal Reserve are intensifying. Admitting to be researching this matter (firing Powell) should be treated very seriously and negatively."

Trump's comprehensive tariffs, coupled with uncertainty in trade policies, has led to global market turmoil, and has also made investors pessimistic about the outlook for the US economy, and funds have withdrawn from US assets, putting pressure on the US dollar.

Asian market

New Zealand recorded a New Zealand dollar trade surplus of 970m in March, far higher than the forecast80m NZD. The surprise was driven by a 19% year-on-year increase in commodity exports, which rose by 1.2B to 7.6B. Imports also saw an increase, up 12% year-on-year to NZ$6.6B.

Exports from major trading partners were particularly strong. Exports to China increased by 371m NZD (23% year-on-year), while exports to the United States and the European Union increased by 22% and 51% year-on-year, respectively. Exports to Japan also increased by 11% year-on-year, although exports to Australia fell slightly, down -0.47% year-on-year.

In terms of imports, the largest increase came from the United States, with a year-on-year increase of 48%, worth 243m NZD. Following closely behind is China and the EU, with year-on-year growth of 14% and 19% respectively. Imports from South Korea went against the trend, down -12% year-on-year.

China has kept the benchmark loan interest rate unchanged for the sixth consecutive month today. The most preferential interest rate for one-year loans remained at 3.1%, and the five-year LPR remained at 3.6%.

The sluggish domestic inflation and growing global trade headwinds, especially the latest wave of tariff threats from the United States, support further easing of policies. However, the People's Bank of China seems reluctant to lead the Fed.

Premature interest rate cuts may exacerbate downward pressure on the RMB, aggravate capital outflows and financial instability.

Japan's core CPI (excluding fresh food) accelerated from 3.0% year-on-year to 3.2% year-on-year, in line with expectations, which is the third consecutive year higher than the Bank of Japan's 2% target. The core CPI, excluding food and energy, rose sharply from 2.6% to 2.9% year-on-year. Although the overall CPI fell slightly from 3.7% year-on-year to 3.6%, the data generally show that inflation remains high.

A prominent feature in the inflation breakdown is the unusual surge in rice prices, which surged 92.5% year-on-year, the fastest pace since 1971. The surge was driven by a number of factors, including a poor harvest caused by extreme high temperatures in 2023 and panic buying from consumers after last year's earthquake warning. This is the sixth consecutive month of rice inflation hitting an all-time high.

In response, the Japanese government has intervened to release more than 210k tons from its rice stocks and plans to auction another 100k tons this month for steady supply.

In addition to food, the prices of household durable goods rose by 6.5% year-on-year, up from 5.4% in February. Although energy prices are still high, they fell slightly from 6.9% to 6.6% year-on-year.

U.S. Market

Chicago Fed Chairman Austan Goolsbee strongly defended the Fed's independence in an interview with CNBC and warned that undermining the Fed's autonomy could have serious long-term economic consequences.

He stressed that maintaining credibility around the Fed's 2% inflation target depends on its action without political pressureability.

"When there is interference in the long run," Goulsby said, "this will mean higher inflation, worse growth and higher unemployment because "the willingness to stand up and do difficult things in difficult times will be a little less."

Goulsby, who joined the Fed more than two years ago, stressed that economic consensus overwhelmingly supports central bank independence. He pointed to global examples in which the lack of this independence has led to significantly worse results ——Higher inflation, weaker growth and higher unemployment.

He made the above remarks as people were highly concerned about the potential political pressure in the White House, as reports said that President Trump was exploring legal ways to remove Fed Chairman Jerome Powell.

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