U.S. President Trump stated that he plans to hold a press conference on Thursday to discuss 'a significant trade agreement reached with representatives of a respected major power.'
In a post on Truth Social, Trump said: 'A major press conference will be held at 10 a.m. tomorrow (10 p.m. Beijing time) in the Oval Office regarding a significant trade agreement reached with a respected major power. This is the first (agreement reached)!'
However, he did not specify which country he was referring to, nor did he mention any potential agreement's scope or details.
Facing political pressure due to polls showing Americans are dissatisfied with Trump's economic management, Trump is under pressure to find a way out of his plan to raise U.S. tariffs to the highest level in a century. After Trump's post, S&P 500 futures rose by as much as 0.5%.
The details of the statement have not been immediately released, but Trump indicated that this will be the first of many measures he seeks to overturn U.S. export barriers and quell market turmoil caused by his extensive tariffs.
Since Trump previewed the 'most significant news ever' on Tuesday, the market has been wildly speculating what the big news could be, and things have become increasingly complicated. Earlier, CNBC reported that the so-called significant news could be the U.S. forcing the Persian Gulf to be renamed the 'Arabian Gulf', and JPMorgan suggested that investors bet on U.S. stocks rising, in case Trump repeats his previous tactics.
Looking back now, could this significant news be the aforementioned announcement about the tariff agreement? This remains an unsolved mystery.
It is worth noting that even if there is indeed any trade agreement, it will come with significant conditions. Negotiating comprehensive trade agreements typically takes years, and discussions with several countries at most may only reach a high-level agreement on commitments and intentions, potentially leaving many details traditionally included in comprehensive trade agreements to be negotiated later.
Market volatility has significantly calmed since the early weeks of April, partly due to Trump's trade concessions, but also due to a series of economic reports providing confidence to bulls. Last Friday's non-farm payroll report showed the unemployment rate stable at 4.2%, and previous service sector economic and inflation reports showed almost no signs of recession.
Federal Reserve Chairman Powell warned of rising risks of unemployment and accelerating inflation in the latest interest rate decision, while also easing market concerns about the U.S. economy, leading traders to remain cautious.
With the implementation of Trump's trade policy, how long good news can last is the biggest question central banks face. Former New York Fed President William Dudley said on Bloomberg TV: 'The Fed is not really sure where tariffs will land, which is important, and when tariffs do land, they are not really sure what the consequences will be for economic growth and inflation. This is not just a central bank plan issue, but also a risk management issue. Try not to make mistakes so that you can respond effectively when things actually happen.'