Markets rise after Trump says he has ‘no intention’ of firing Powell

Today’s agenda: Putin’s offer; Lutnick’s son in crypto venture; Musk prioritises Tesla over Doge; crackdown on US science; and Maga Catholics seek “Trump-like” pope

Good morning. Markets surged overnight after comments by Donald Trump suggested a change of heart over US Federal Reserve chair Jay Powell, continuing yesterday’s rally after the president’s Treasury secretary Scott Bessent said a trade war with China was “unsustainable”.

Here’s what they said: Trump said he has “no intention” of firing Powell, following a sell-off in markets sparked by his remarks last week. The president had earlier signalled he believed he could dismiss the Fed chair for not cutting borrowing costs. Earlier in the day, Bessent told a private JPMorgan conference that he expected Washington and Beijing would reach a deal in the “very near future”.

How markets reacted: Asian markets including Japan and Hong Kong climbed this morning, while US stock futures also rose, pointing to gains for the S&P 500 and Nasdaq 100 later today. The dollar also grew against a basket of its peers. Yesterday, Wall Street stocks rallied and oil prices climbed after Bessent’s comments, while gold, which hit a record earlier in the day, retreated 1.4 per cent.

What this means: Several people familiar with Bessent’s remarks said markets had reacted too optimistically yesterday, noting that he had made clear that there were no US-China trade talks under way. Some investors also credited the Treasury secretary for the apparent U-turn on Powell, which they said proved some members of Trump’s inner circle recognised markets valued the Fed’s independence. “This shows there are some guardrails around this president,” one fund manager said, adding: “This feels like Bessent’s touch.”

• Chip tariffs: Levies on components of foreign-made semiconductors would function as a major tax increase on electronics sold in the US, writes Chris Miller.

• US retail: Amazon and Walmart’s third-party sellers are hoarding stock in Canada as they try to wait out Trump’s trade war with China.

Meanwhile, the IMF/World Bank gathering continues, with Bessent and Bank of England governor Andrew Bailey among those set to speak at the IIF Global Outlook Forum, an event held alongside the spring meetings. Here’s what else we’re keeping tabs on today:

• Economic data: The EU, UK, US, France and Germany release purchasing managers’ indices, while the US Federal Reserve publishes its Beige Book on economic conditions.

• G20: Finance ministers and central bank governors meet in Washington.

• Companies: Boeing, IBM, Philip Morris International and Randstad report results while Fresnillo and Heathrow provide updates. 

Join Unhedged’s Robert Armstrong and other FT experts for a webinar at 1pm BST today, as they discuss how Trump’s policies have reshaped markets. Register for free.

Five more top stories

1. Vladimir Putin has offered to halt his invasion of Ukraine at the current front line as part of efforts to reach a peace deal with Trump, according to people familiar with the matter. The US has since floated ideas for a possible settlement that includes recognising Russia’s annexation of Crimea. Here are more details on Putin’s proposal.

2. Exclusive: Howard Lutnick’s son is partnering with SoftBank, Tether and Bitfinex to capitalise on a crypto revival under Trump. Brandon Lutnick, who took over as Cantor Fitzgerald’s chair after his father became US commerce secretary, is creating a multibillion-dollar bitcoin vehicle that will absorb billions in cryptocurrency from the other partners.

3. Exclusive: Grant Thornton US is in talks to buy more than half a dozen of its sister firms in Europe and the Middle East in a private equity-driven acquisition spree that will dramatically reshape the accounting firm’s global network. Stephen Foley has more details from New York.

4. Elon Musk said he would refocus his attention on Tesla and “significantly” scale back his US government role after profits at the billionaire’s carmaker cratered in the first quarter. But Musk stressed he would probably remain the figurehead for the so-called Department of Government Efficiency until the end of Trump’s term.

5. Former Credit Suisse CEO Tidjane Thiam has been removed from Ivory Coast’s electoral register by a court, according to his lawyer, in a ruling that could end his bid to run for president in a vote in October. Thiam has described the ruling, which cannot be appealed, as “democratic vandalism”. Here’s why he was struck off the electoral roll.

The Big Read

The Trump administration has embarked on a wide-ranging campaign to shrink publicly funded US science, slashing finance for leading organisations and suppressing research on subjects including gender inequalities, vaccines and climate change. Critics say the cuts, fuelled by cost-cutting and ideological missions, threaten to undermine the innovation that has powered America’s economic success — and ultimately risk ceding scientific leadership to China.

We’re also reading . . . 

• Maga Catholics: A growing number of Americans hope Pope Francis’s death will mark a decisive conservative shift and pave the way for a “Trump-like pope”.

• Tradwives: Domestic influencers have become pin-ups of the religious right’s quest for higher birth rates, writes Chine McDonald of think-tank Theos.

• ‘Medical misogyny’: Doctors and patients are criticising the UK’s waiting time for diagnosing endometriosis, a common gynaecological condition, which has hit nine years.

• German rearmament: The country’s push to boost defence production is offering a glimmer of hope for workers facing manufacturing job losses.

Chart of the day

The IMF has tried its very best to predict what Trump’s war might mean for the global economy, writes Martin Wolf. But the fund, like everyone else, has no idea what the US president will do next, an uncertainty that is itself economically paralysing.

Take a break from the news

What does the future of beer look like? HTSI drinks columnist Alice Lascelles visited the new Heineken Studio in Amsterdam for a taste of innovations including flavoured foams and a “personalised draught system”.