Asian Markets Rally as Trump Calms Fed Fears and Signals Tariff Relief

Asian stocks rallied sharply on Wednesday, following Wall Street’s lead, after U.S. President Donald Trump made comments that soothed investor concerns over Federal Reserve independence and signaled a potential softening in the ongoing U.S.–China trade war.

Markets had been on edge earlier this week after Trump publicly criticized Fed Chair Jerome Powell—calling him a “major loser” and “Mr. Too Late”—for not cutting interest rates aggressively enough.

Rumors swirled that the president might be considering firing Powell, a move that could have triggered a crisis of confidence in U.S. monetary policy and rocked global financial markets.

But on Tuesday, Trump appeared to dial down the drama, telling reporters, “I have no intention of firing him.” He added that while he would prefer a more proactive approach from Powell on lowering rates, the Fed chief’s position wasn’t under threat. “If he doesn’t [cut rates], is it the end? No,” Trump said.

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The president’s reassurance helped calm market nerves, offering a sense of stability at a time when investor sentiment has been rattled by economic uncertainty and aggressive U.S. trade policies.

Markets reacted positively, with major indexes across Asia posting solid gains. Tokyo, Hong Kong, Sydney, Seoul, and Wellington each rose over 1%, while Taipei surged more than 3%. Singapore and Jakarta also closed higher, though Shanghai and Manila lagged slightly.

Adding to the upbeat mood were Trump’s unexpected remarks on tariffs. While Washington has slapped tariffs as high as 145% on Chinese goods—and Beijing has responded with 125% duties—the president acknowledged Tuesday that these rates were “very high” and hinted they would be “coming down substantially.”

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He clarified that they wouldn’t drop to zero but emphasized a softer stance: “They will not be anywhere near that number.“

Treasury Secretary Scott Bessent also contributed to the optimism, stating at a closed-door event that the current tariff structure was “unsustainable” and that he anticipated a de-escalation soon. White House Press Secretary Karoline Leavitt backed the sentiment, saying the administration was “setting the stage for a deal” and that “the ball is moving in the right direction.”

Investors responded with relief, pushing not only stocks but also currencies and commodities into positive territory. Gold, which had soared to a record $3,500 on Tuesday as a safe-haven play, pulled back to around $3,370. Meanwhile, the dollar regained some ground against the pound, euro, and yen.

The positive momentum followed a strong session on Wall Street, where the Dow, S&P 500, and Nasdaq each gained more than 2%. Chris Weston of Pepperstone summed it up: “While it is still early days, the mood in the market is evidently shifting… The strong ‘sell America’ vibe has, in part, reversed.”

Despite the International Monetary Fund slashing its global growth forecast by 0.5 percentage points to 2.8%—citing the economic fallout of Trump’s tariff strategy—investors appeared more focused on signs of political and economic stabilization.

With the market mood shifting from fear to cautious optimism, all eyes will now be on the next moves from both the Fed and the White House.