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Powell Warns Tariff Impact on U.S. Rate Cut Process; Trump to Announce Major Trade Agreement Tonight

On May 8, Federal Reserve Chairman Powell warned at a press conference that the tariff policy implemented by President Trump on April 2 was "far beyond expectations." Powell stated that this level of tariffs could trigger an economic slowdown, which in turn may drive long-term inflation higher.

Powell mentioned that if the announced tariffs remain in effect, both inflation and unemployment rates could rise, potentially impacting economic growth. Although some inflationary effects may be temporary and only lead to a one-time price increase, Powell pointed out that if tariffs are maintained at their current level for an extended period, the Federal Reserve's progress towards achieving its policy goals may be delayed until next year.

Meanwhile, Trump revealed on social media that he will hold a press conference at 10 PM (Beijing time) in the Oval Office tonight to announce a significant trade agreement reached with "a major and respected country." Trump described this as "the first of many agreements," and this news has sparked widespread market attention and anticipation. Further disclosures regarding the contents of both sides may have profound impacts on offshore markets and international trade dynamics.

Overall, against the backdrop of a volatile global economic situation, the tariff policy and the upcoming trade agreement will undoubtedly have far-reaching effects on market and investor confidence. We will continue to monitor the progress of these two policies and their potential subsequent impacts.

What are your thoughts on the impact of tariff policies on the U.S. economy? What expectations do you have for the trade agreement Trump is about to announce? Share your views and opinions in the comments section!

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