Amid economic firestorm, Trump reveals real reason behind ‘tariff’ onslaught

Kuala Lumpur, April 6, 2025 – U.S. President Donald Trump has ignited a firestorm of economic speculation and market turmoil with his aggressive tariff agenda, which he appears to have endorsed as a deliberate strategy to tank the stock market and pressure the Federal Reserve into slashing interest rates. The move, unveiled during Wednesday’s “Liberation Day” event, has already erased $6.6 trillion from U.S. stock values in the worst two-day wipeout in Wall Street history, leaving investors and analysts scrambling to decipher the administration’s endgame.

Economic firestorm

In a fan-made video shared by Trump on Truth Social, the president is depicted as orchestrating a “genius chess move” to crash the stock market by 20% this month. The purported goal: weaken the dollar, lower mortgage rates, and allow the U.S. to refinance trillions in national debt at a bargain. However, the video’s claim of support from billionaire investor Warren Buffett was swiftly debunked. On Friday, Buffett’s Berkshire Hathaway issued a statement denying any endorsement, clarifying that “all reports circulating on social media regarding comments allegedly made by Warren E. Buffett are false.” Buffett, a known tariff skeptic, told CNBC he would refrain from commenting on the agenda until Berkshire’s annual meeting on May 3.

Trump doubled down on his strategy Friday, urging Federal Reserve Chairman Jerome Powell to cut interest rates immediately. “This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always ‘late,’ but he could now change his image, and quickly,” Trump wrote on Truth Social. He touted recent economic gains, claiming, “Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months – A BIG WIN for America.” Yet, these assertions contrast sharply with the market’s reaction and expert forecasts.

Uncertain Outlook

Powell, speaking at an event near Washington, D.C. on Friday, delivered a stark rebuttal. “We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” he warned, noting that the tariffs—broader and higher than anticipated—are “highly likely to generate at least a temporary rise in inflation,” with potential for more lasting effects. “It is now becoming clear that the tariff increases will be significantly larger than expected,” Powell added, projecting “higher inflation and slower growth” as likely outcomes. Wall Street took his remarks as a signal that rate cuts are off the table for now, amplifying the sell-off.

The mixed messaging from Trump has deepened confusion. While he now hints at crashing the economy to force Fed action, his earlier rhetoric framed the tariffs as a tool to boost American jobs through increased domestic production—no mention of interest rates or debt refinancing. The disconnect has left markets reeling and analysts divided.

Posts on X reflect the uncertainty gripping the financial world. One user, identified as a market analyst, wrote, “Trump’s call for Powell to cut rates aligns with his tariff strategy, which has already cost the U.S. stock market $9.6 trillion since his inauguration” (paraphrased from posts on X). Another speculated, “From an investment perspective, stock markets are expected to keep declining—not just due to tariffs, but Trump’s apparent intent to devalue the dollar by pressuring the Fed” (paraphrased from posts on X). These sentiments underscore the growing unease among traders and investors.

Fed rate cuts

Experts elsewhere echo Powell’s concerns. “Tariffs reduce the chance of Fed rate cuts and push up U.S. yields as inflation expectations rise,” noted a rates strategist on X, aligning with Powell’s view that the policy could backfire economically. Michael O’Rourke, chief market strategist at JonesTrading, told Reuters, “Every time you have structural change, you’re going to have uncertainty and friction. It’s understandable people are starting to take profits.” The S&P 500 plummeted nearly 6% on Friday alone, its worst week since the 2020 pandemic crash, as China retaliated with matching tariffs, escalating fears of a global trade war.

For Malaysia, a key U.S. trading partner, the fallout could ripple through export-dependent sectors like electronics and palm oil. Analysts warn that a prolonged U.S. market downturn and higher inflation could dampen demand for Malaysian goods, though a weaker dollar might offer some export competitiveness—if Trump’s gambit succeeds.

As Trump and Powell square off, the world watches a high-stakes economic showdown unfold. Will the president’s tariff blitz force the Fed’s hand, or will it cement a legacy of market chaos? For now, clarity remains elusive, and Wall Street braces for more turbulence.

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