Trump latest: Gold price hits new high after dollar plunges following president’s attacks on Fed chair Powell

Taiwan is planning to increase its purchases of U.S natural gas and oil as it seeks a zero-tariff agreement with the White House.

Taiwan’s president Lai Ching-te pledged to invest more in America on Tuesday, as he seeks to avoid tariffs of 32 percent on all exports to the U.S.

“Increasing purchases from the United States, including natural gas, oil, and other essential national energy sources, is not only the next focus of the tariff negotiations between Taiwan and the U.S., but also an important part of Taiwan’s efforts to strengthen its energy autonomy and resilience,” his office cited him as saying on Tuesday.

Taiwan currently gets about 10 percent of its liquified natural gas from the U.S., and Taiwan’s economy minister said earlier this month it could lift its imports from the U.S. by a third to help reduce the trade deficit.

“I have agreed to do the Commencement Address at two really GREAT places, the University of Alabama and, WEST POINT. Stay tuned for times and dates!!!” the president wrote on Tuesday.

The funding freeze was punishment for Harvard not accepting a long list of demands for changes at the school, including scrapping its diversity, equity and inclusion programs and overhauling its governance and enrollment policies.

“The government has not — and cannot — identify any rational connection between antisemitism concerns and the medical, scientific, technological and other research it has frozen that aims to save American lives, foster American success, preserve American security, and maintain America’s position as a global leader in innovation,” the university’s complaint read.

Donald Trump has been angry at Federal Reserve chair Jerome Powell for not lowering interest rates sooner, labelling him “Mr Too Late”.

It’s worth looking at what central banks do, following those comments.

In the past few years, central banks around the world used monetary policy through higher interest rates to fight rising inflation following the pandemic, as higher borrowing costs helped ease demand.

As those interest rate increases worked to lower inflation, many central banks have since started cutting rates.

The Federal Reserve cut interest rates to 4.25-4.5 per cent late last year, but other central banks have made additional cuts this year. Most recently, the European Central Bank cut its key interest rates last week.

The Fed Reserve’s next meeting is May 6-7, but as Powell said the recent large changes to tariffs could lead to a rise in inflation.

As he said: “For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance.”

Donald Trump’s repeated criticisms of Federal Reserve chair Jerome Powell have driven a flight from U.S. assets and undermined the dollar, while the threat of tariffs continues to be a drag on markets around the world.

“The ‘sell America’ trade was in full flight,” Tapas Strickland, head of market economics at NAB, told Reuters.

“Whether or not President Trump is legally able and willing to move against the Fed, the jousting underscores the loss of U.S. exceptionalism and the very real policy risk for investors.”

Analysts at JPMorgan also noted the average trade deal took an average 18 months to negotiate and 45 months to implement, as the White House continues negotiating with trade partners around the world while higher tariffs remain on hold.

“We reiterate our view that if current policies do not change, then the probability of a U.S. recession in 2025 is 90 percent,” they said in a note.

The U.S dollar hit a low not seen in three years as the president again lashed the central bank chair.

The ICE U.S. Dollar Index, which measures the dollar against multiple other foreign currencies, fell to 97.92 by market close on Monday, its lowest level since March 2022, according to FactSet.

Global markets also responded to Trump’s latest tirade against the Federal Reserve, with the Dow Jones Industrial Average slumping by 1,221 points lower (3.1 percent). The S&P 500 dropped 3.3 percent, and the Nasdaq Composite lost 3.6 percent.

The president has again attacked Federal Reserve chair Jerome Powell, claiming the economy could slow if interest rates were not lowered immediately.

“‘Preemptive Cuts’ in Interest Rates are being called for by many. With Energy Costs way down, food prices (including Biden’s egg disaster!) substantially lower, and most other ‘things’ trending down, there is virtually No Inflation,” Donald Trump wrote on his Truth Social platform on Monday night.

“With these costs trending so nicely downward, just what I predicted they would do, there can almost be no inflation, but there can be a SLOWING of the economy unless Mr. Too Late, a major loser, lowers interest rates, NOW.

He continued: “Europe has already ‘lowered’ seven times. Powell has always been ‘To Late,’ except when it came to the Election period when he lowered in order to help Sleepy Joe Biden, later Kamala, get elected. How did that work out?”

Last week, Trump threatened Powell faced “termination” soon, after the Federal Reserve chair said the bank would take a wait-and-see approach to interest rates in the face of economic uncertainty.