Thu Apr 17 02:05:33 UTC 2025: ## Trump’s Trade Talks Boost Market Hopes, But Wall Street Plunges on Fed Chair’s Warning

**New York/Tokyo** – President Trump’s surprise intervention in US-Japan trade talks yielded what he called “big progress,” sparking optimism in some Asian markets. However, Wall Street suffered sharp losses Wednesday, closing down over 2 percent (S&P 500) and 3 percent (Nasdaq), fueled by Federal Reserve Chair Jerome Powell’s warning about the economic risks of Trump’s tariffs.

Trump personally joined negotiations with Japanese officials, aiming to finalize a deal before his 90-day tariff pause expires on July 9th. While Japanese officials expressed cautious optimism, acknowledging the challenges ahead, the uncertainty surrounding Trump’s ongoing trade war continues to unsettle investors.

Powell cautioned that the tariffs could create a difficult economic scenario, combining slow growth, increased unemployment, and higher inflation. This conflicting pressure on the Fed’s dual mandate of maximum employment and stable prices is causing concern among economists and investors.

The US-Japan trade talks are particularly significant, given Japan’s substantial role as a US trading partner and investor. The existing tariffs, including a 10 percent baseline tariff and additional duties on cars, steel, and aluminum, have already impacted Japanese businesses.

While Asian markets showed some early recovery Thursday, the continued uncertainty surrounding Trump’s trade policy and the Fed’s warning cast a long shadow over global markets. The S&P 500 and Nasdaq are now down approximately 10 percent and 15 percent, respectively, year-to-date. The ongoing volatility highlights the significant economic consequences stemming from Trump’s protectionist trade policies.

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