The S&P has dropped the most under Trump for any president at this point in their presidency, since the S&P 500 was in fact created back in 1957. And indeed, it is not anywhere close. Folks, it's not anywhere close. Under Trump, it's dropped. Get this 14%. [00:00:17] If Donald Trump believes that he can somehow escape blame if there is, in fact a recession, I'm here for a reality check. He will, simply put, not be able to do so. Blame Trump if there is a recession in the next 12 months. Look at this a lot or quite a bit. That's the majority winner right there 52%. [00:00:34] Those are some pretty bleak numbers for President Donald Trump, who has lost quite a bit of favorability in regard to his economic policies. Obviously, it has a lot to do with his tariffs policies. It has to do with the fact that he keeps threatening to fire Jerome Powell, the head of the Federal Reserve. [00:00:50] But those numbers that Harry Enten just shared with us could be the reason why Trump appears to be softening his message a little bit, at least when it comes to two of his biggest crusades higher tariffs, of course, and lower interest rates. But Trump's press secretary, Caroline Caroline Leavitt, [00:01:07] is contradicting what he's saying. So there's still a lot of uncertainty in the market right now. And we're going to get to all of that in just a minute before we get to Caroline Leavitt. Let's start with the tariffs policy and what Trump is saying now. So yesterday, Trump reportedly and repeatedly stated that the sky high, 145% [00:01:28] tariffs on China will not be permanent. In fact, let's watch him talk about that. 145% is very high and it won't be that high. It's not going to be that high. It got up to there. We were talking about fentanyl where, you know, various elements built it up to 145. [00:01:48] - No, it won't be anywhere near that high. - What level do you think. It will come down? Substantially, but it won't be zero. It used to be zero. We were just destroyed. China was taken us for a ride and just not going to happen. [00:02:04] I think it's going to work out very well, but no, it's at 145%. It will not be anywhere near that number. So that is a softening of Trump's tone for sure. Now what's behind it? Well, there could be a number of different reasons, but it turns out that executives [00:02:20] from Lowe's, Home Depot, Walmart and Target hit the president up, showed up at the white House. They met with him, and they started warning about some of the ramifications of these super high tariffs. One of those ramifications could be empty store shelves. [00:02:38] And honestly, that messaging toward Donald Trump, I can see how effective it could be because of what it evokes. It evokes the supply chain disruptions that led to empty shelves during Covid. I think Covid was the main reason why Trump lost his reelection bid in 2020. [00:02:55] So it appears that that had some influence over him. But if you look at the different numbers that his administration is now considering in regard to tariffs against China or products imported to the United States from China, it doesn't really seem like they're going to be soft on China. [00:03:13] I'm going to keep it real with you. So let's get into those details right now. So this morning, The Wall Street Journal reported more details on what the Trump administration has in mind when it comes to China tariffs. One senior white House official said the China tariffs were likely to come [00:03:28] down to between roughly 50% and 65%. I mean, whether it's 145% or 60%, does it really matter? I mean, like, is that really going to make much of a difference? It's not okay with tariffs that high. [00:03:45] We're not going to import or businesses are not going to want to import products from China into the United States. But nonetheless, I personally think it's effectively the same thing or it's going to have the same outcome. So the administration is also considering a tiered approach [00:04:01] similar to the one proposed by the white. By the House Committee on China late last year. That includes a 35% levy for items. The United States deems not to be not a threat to national security. And at least 100% for items deemed as strategic to America's interests. [00:04:21] So look, I think that doing targeted tariffs could make a lot of sense. I've said this repeatedly. I'll say it again. Donald Trump's tariffs against China in his first term were targeted. And in fact, they worked out so well that the Biden administration kept them [00:04:36] in place and expanded on them further. But Biden didn't expand on them in a ridiculous way. He did it carefully, thoughtfully, strategically, in a way that suits America's interests. And that's why I wouldn't have a problem with Trump doing something similar to targeted tariffs. [00:04:53] In this case. He just kind of bit off more than he could chew. He assumed he could bully all these different countries into giving him exactly what he wants. And in the case of XI Jinping, the president of China, he's actually calling Trump's bluff. And Trump's starting to panic a little bit about that, as you can see [00:05:10] from how these negotiations are going. In fact, experts are arguing that those 50% tariffs that the Trump administration is considering against Chinese imports would basically still shut down almost all trade between the United States and China. So we'll see what he ends up deciding in the end. [00:05:27] But China clearly believes that they are the ones with the upper hand here. I don't know if that's necessarily true. We have 330 million Americans here. That's a lot of consumers that China wants to, of course, profit from, make money from. But in China's policymaking circles, Trump's comments on Tuesday of this week [00:05:46] were viewed as a sign of him folding, people who consult with Chinese officials said. And guess what? Trump has been hoping that he'd get a call from President XI. That hasn't happened. In addition to that, the administration has been pushing for China's foreign minister to hit up Marco Rubio and have a chat with him. [00:06:06] So far, that hasn't happened either. But while Trump softened his tone on China, his press secretary, Caroline Leavitt, kind of contradicted his messaging. Take a look. Is it fair to say, Caroline, that the president's stance on tariffs with China is softening? [00:06:23] I don't think that's fair to say. In fact, I spoke to the president about it this morning. He is not going to give up on ensuring that there are fair trade practices around the world. He is not giving up on the fact that China has been ripping off the United States of America for far too long. Let me be clear. [00:06:38] There will be no unilateral reduction in tariffs against China. The president has made it clear China needs to make a deal with the United States of America. And we are optimistic that will happen. And when that continues, it will be up to the president what the tariff rate on China will be. [00:06:54] But we certainly need to see a reduction in tariffs and non-monetary tariff barriers from China as well. Okay. But I think it's pretty clear that China isn't willing to negotiate here, right. Based on what Trump has kind of opened with, President XI has not budged at all. [00:07:14] So this this idea that the percentage that Trump wants to tack on for Chinese tariffs isn't going to come down until China engages in a negotiation. Again, is kind of counter to what Trump was saying earlier. This just leads to more uncertainty in the markets. [00:07:31] Again, I want to reiterate, I wouldn't have a problem with tariffs if they're targeted, strategic and actually did serve the best interests of the American people, even if there's a little bit of short term pain on some items. You know, if it suits our national security or what have you, especially as [00:07:48] it pertains to things like pharmaceutical drugs, I would be open to that. But that's not what we have here. We have this weird blanket policy. I get that you want to start a negotiation off with, like, the highest possible number, and then you just kind of go back and forth until you come up with a number that makes sense for both parties. [00:08:05] But again, President XI just will not budge on this so far. So when it comes to China, you know, the future still appears to be incredibly uncertain when it comes to, you know, our trade relationship. So that's what we know for now when it comes to Trump's tariffs policy. [00:08:20] But let's move over to the notion of firing Jerome Powell, the head of the Federal Reserve, because of the fact that he's unwilling to do Trump's bidding and lower interest rates prematurely. So President Donald Trump is now backing off of his threats toward Jerome Powell. [00:08:37] He had said earlier that he wants to fire him, and now he's like, what? Who, me? Me? You think I want to fire Jerome Powell? Okay, so let's back up. This is this is what I love. Like he says something one day, next day he says something entirely different and [00:08:54] tries to make you out to be the crazy one. So basically, this kind of started last week when Trump wrote Powell's termination cannot come fast enough. Now, again, Trump wants the Federal Reserve to lower interest rates. [00:09:09] Jerome Powell is holding off on that, partly because of the uncertainty that comes along with Trump's tariffs policy, but also because of the fact that inflation has been far more sticky than he expected. Now, the Federal Reserve has lowered interest rates a little bit, [00:09:26] and they were planning to continue doing so for the rest of the year. But they have kind of paused on that. And that's why Trump is so upset. So he also said last week, if I want Powell out, he'll be out of there real fast. Believe me Willie. [00:09:43] Now look, it wasn't just Trump who was making statements like this. Apparently, white House economic adviser Kevin Hassett said Friday that Trump and his aides were actively studying the possibility of firing Powell. Now, as we shared with you all earlier this week, the president of the [00:09:58] United States does not have the ability to oust the head of the Federal Reserve unilaterally without cause. Powell would have to engage in malfeasance or some sort of bad behavior that would justify the president being able to fire him to get rid of him. [00:10:14] But because of congressional legislation that passed earlier, again, the president would be unable to just fire Powell. And Powell is unwilling to resign despite the pressure he's been facing from Donald Trump and his administration. So now all of a sudden, after the stock market reacted poorly [00:10:31] to Trump's attempts to, you know, oust Jerome Powell, Trump's now softening his message on Powell as well. In fact, let's take a look at what he has to say. I have no intention of firing Jerome Powell because we're going to pass it in. A few days ago said that you and people in the white House are studying this idea [00:10:50] of possibly even before his term ends. - Do you have any plans on doing that? - None whatsoever. Never did. The press runs away with things. No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea [00:11:06] to lower interest rates. This is a perfect time to lower interest rates. If he doesn't, is it the end? No it's not, but it would be good timing. It would be if we could have taken place earlier. But no, I have no intention to fire him. [00:11:22] You know, Jerome Powell would lower interest rates if Trump actually followed through with his campaign promise to lower inflation. But as we know, tariffs lead to inflationary pressure in the economy. And that's part of the reason why Jerome Powell is kind of pausing, [00:11:38] backing off of the original plans of lowering interest rates further this year. So look, again, I think Trump has backed himself up in this ridiculous corner. And he didn't need to do that if he had focused on targeted tariffs. [00:11:55] If he had focused on ways to alleviate the inflation that Americans had been experiencing and have been experiencing in the economy, when it comes to certain sectors of the economy, I think he'd be in a way better position right now when it comes to getting one of the main things he wants lower interest rates, but that requires planning ahead. [00:12:13] That requires, you know, having a cohesive policy ahead of time and moving forward with it. It kind of seems like he's the kind of guy who likes to throw things at the wall and see what sticks, which is fine in other contexts, but not when it comes to the economy and not when it comes to the context [00:12:31] of the economic situation most Americans, working Americans have been dealing with, which, again, high inflation. You know, the housing market is still in shambles. It's a complete and utter disaster for Americans who are looking to buy a home. It's hard for Americans who want to rent in certain parts of the country. [00:12:47] These are issues that Trump could be focusing on. He could ban private equity firms from buying up residential real estate. These are things he could do easily to improve his approval rating when it comes to his economic situation or handling of the economy. But that's not what he's doing. [00:13:03] He's kind of going forward with a policy that's kind of hard to decipher at the moment. Now, it turns out that Treasury Secretary Scott Bessant and Commerce Secretary Howard Lutnick were the two individuals within the administration who encouraged Trump to back off calls [00:13:20] to get Jerome Powell fired. So apparently they say that, look, these threats to fire Jerome Powell are adding fuel to the fire. It's leading to more, you know, an unstable situation in the economy. [00:13:35] The stock market's not reacting well to it. Don't do this. And on top of that they're also saying, look, if you get rid of Powell, he's going to be replaced with someone who's very likely going to have a similar monetary policy that he has. And so what's the point? It's only going to harm the markets, the stock market specifically. [00:13:53] Let's just back off this idea and see if we can maybe catch some flies with honey. We'll see. We'll see what happens. But Trump is you know, he's a little bit chaotic. You never know what he's going to say on any given day. And what's also not really inspiring much confidence [00:14:08] is the fact that different administration officials say different things. You'll hear Trump say one thing and then hours later, his press secretary contradicts the very thing he said about his plans. So we'll see what happens. But right now, those low approval ratings on the economy for Trump not a good look. [00:14:27] And I know it probably gets under his skin. The good news is it doesn't seem as though he's immovable. It seems as though with enough pressure, with enough, you know, evidence that his policies are actually causing harm to his administration. He is willing to negotiate and kind of back off some of the more damaging, [00:14:46] you know, policies or ideas he has. Every time you ring the bell below, an angel gets its wings. Totally not true, but it does keep you updated on our live shows.