US stocks waved on Trump's tariff block & unblock by courts

·       Wall Street futures stumbled from Asian session high as the Trump administration has ensured a favorable tariff order from the Appellate Court  against the CIT order

·       Trump also summoned Fed Chair Powell and pressed for an immediate rate cut by June’25 (?)

·       FOMC minutes show Fed’s wait & watch stance amid lingering Trump tariff uncertainty; Fed may not cut before September’25

·       But Trump may also cut the rate from June-July’25 as Trump may have explained to him that the overall basic tariff would be 10% along with targeted sectoral tariffs

On Wednesday, May 28, 2025, Wall Street slipped on less dovish FOMC minutes (a maximum of two rate cuts in late 2025), lingering Trump trade and tariff uncertainty, and the Trump administration’s latest salvo against China regarding the restriction of tech design. But in the early Asian Session, Thursday, Wall Street Futures surged sharply after a US trade court blocked Trump’s Liberation Day tariffs. After the Court ruling, stock futures and USD rose, reflecting relief from trade war uncertainty.

However, the appeal and potential alternative legal routes (e.g., other trade laws) suggest lingering uncertainty. UST was under stress as the court (CIT) ordered Trump (US Treasury) to refund tariffs already collected, negative for the US trade deficit. Gold slid on the fading concern of Trumpcession. But on early US Thursday, Wall Street Futures stumbled as the market realized that the Trump admin would go for a lengthy court battle and may also continue the tariff agenda; Gold again surged on lingering trade & tech war, especially with China.

NVIDIA is facing bipartisan fire for its China AI Chip factory

Nvidia is facing bipartisan criticism from U.S. Senators Jim Banks (R-Ind.) and Elizabeth Warren (D-Mass.) over its plans to establish a research facility in Shanghai, raising concerns about potential national security risks and the transfer of sensitive AI technology to China. In a letter to Nvidia CEO Jensen Huang, the senators demanded a detailed timeline and overview of the facility’s plans, including specific research initiatives and financial incentives, citing “significant national security and economic security issues.”

Nvidia clarified that the facility will only house existing employees and involve no advanced chip design transfers. However, the move comes amid heightened U.S. scrutiny of tech ties with China, especially as both the Trump and Biden administrations have tightened export controls on Nvidia’s AI chips, which generated $17 billion (13% of total sales) from China last fiscal year. Huang has argued that restricting exports could accelerate China’s AI development, emphasizing the importance of engaging with one of the world’s largest AI markets, and now China contributes almost 50% of AI researchers alone. Restricting techs to China will motivate them more to produce domestically.

This scrutiny aligns with broader efforts to curb China’s access to advanced U.S. technology. For instance, lawmakers like Representatives John Moolenaar and Raja Krishnamurthy have pushed for export controls on Nvidia’s H20 chip, used by Chinese AI firm DeepSeek, and proposed legislation to track AI chip locations to prevent smuggling. Warren Elizabeth has also urged the Commerce Department to block Nvidia’s H20 exports, citing national security risks and potential undue influence from a meeting between Huang and President Trump. These developments reflect ongoing tensions between U.S. national security priorities and Nvidia’s business interests in China.

On May 29, 2025, Peter Navarro, a senior trade adviser to President Trump, commented on a trade court ruling during an interview, stating that the Trump administration was not surprised by the decision. Navarro emphasized that "nothing has changed" despite the ruling, asserting that the administration has a strong case and multiple options on the table to advance its trade agenda. He described the situation as an "economic emergency," criticizing the judiciary for obstructing Trump's policies, claiming that "courts are getting in the way of the Trump agenda." Navarro's remarks reflect his continued defense of the administration’s aggressive tariff policies, which have sparked significant market volatility and debate.

White House economic advisor Peter Navarro on Bloomberg:

·       There is no question, this is an economic emergency.

·       The Trump administration is not surprised by the trade court ruling

·       CBO is historically bad at estimating tax bills

·       The Trump administration has many options for trade

·       Courts are getting in the way of the Trump agenda

·       Trade deals are going to happen

·       Navarro on trade court ruling: Nothing has changed

Meanwhile, Kevin Hassett, Director of the National Economic Council, stated on Fox News that the court decision striking down the Trump administration's global tariffs will likely be overturned on appeal. He emphasized that the ruling won't impact ongoing trade negotiations and that the administration has alternative options to enforce its trade policy. Hassett also mentioned that three trade deals are nearly finalized, pending approval from President Trump, with more agreements expected soon.

The Trump administration is actively responding to the U.S. Court of International Trade ruling that blocked most of President Trump’s tariffs, deeming them an overreach of executive authority under the International Emergency Economic Powers Act (IEEPA). The administration has filed an appeal with the U.S. Court of Appeals for the Federal Circuit, requesting a stay to keep the tariffs in place during the appeals process, arguing that the ruling "jeopardizes ongoing negotiations with dozens of countries" by undermining the president’s leverage in trade talks.

Additionally, the Trump administration may ask the Supreme Court as early as Friday, May 30, 2025, to intervene and maintain the tariffs, reflecting a strategy to preserve their trade policy. The White House has criticized the ruling, with spokesperson Kush Desai asserting that trade deficits constitute a national emergency and that “unelected judges” should not dictate responses to such crises. The case could ultimately reach the Supreme Court, especially given the lack of precedent on IEEPA’s use for tariffs and the administration’s claim of executive flexibility. However, the ruling does not affect sector-specific tariffs (e.g., on autos, steel, and aluminum) imposed under other statutes like Section 232 of the Trade Expansion Act, which remain intact.

The Trump administration is poised to escalate its legal battle over tariffs by potentially requesting emergency relief from the U.S. Supreme Court as early as Friday, May 30, 2025, to pause a U.S. Court of International Trade ruling that blocked most of President Trump’s global tariffs. The administration swiftly appealed to the U.S. Court of Appeals for the Federal Circuit and has indicated it will seek Supreme Court intervention if the appeals court does not grant a stay to keep the tariffs in place during the appeal process.

The Justice Department argues that the ruling undermines national security and economic interests by weakening the president’s leverage in trade negotiations. White House officials, including spokesperson Kush Desai, have criticized “unelected judges” for interfering with Trump’s agenda, while trade adviser Peter Navarro expressed confidence in overturning the ruling, citing alternative legal pathways like Section 122 of the Trade Act of 1974 or Section 301 investigations. The case’s outcome could significantly impact Trump’s trade war strategy, with markets reacting cautiously to the ongoing uncertainty.

On May 29, 2025, Federal Reserve (Fed) Chair Powell met with President Trump at the White House to discuss economic developments, including growth, employment, and inflation. According to the Federal Reserve’s official statement, Powell did not share expectations for future monetary policy during the meeting, emphasizing that policy decisions would be driven by incoming economic data and its implications for the economic outlook. Powell reaffirmed that he and the Federal Open Market Committee (FOMC) would set monetary policy independently, guided by the Fed’s mandate to support maximum employment and stable prices, and based on objective, non-political analysis. This meeting follows reports of Trump’s push for greater influence over Fed policy, including a suggestion that Powell consult with him on interest rate decisions, which raised concerns about central bank independence.

Fed Statement on Chair Powell's meeting with the President on May 29, 2025

“At the President's invitation, Chair Powell met with the President today at the White House to discuss economic developments, including growth, employment, and inflation.

Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.

Finally, Chair Powell said that he and his colleagues on the FOMC will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis.”

On May 29, the White House Press Secretary Leavitt said:

·       We hope the Supreme Court will weigh in

·       DC judge ruled against Trump's tariff power

·       The US is fighting a block in the trade court

·       There will be no increase in the deficit from the tax bill

·       CBO's forecast makes anaemic growth assumptions

·       CBO tax bill estimate is a shoddy assumption

·       Senate Republicans should pass the tax bill

·       The US filed an emergency motion for a stay

·       The Supreme Court must put an end to this

·       The trade court abused judicial power

·       Courts should have no role in tariffs

·       Trump's rationale is legally sound

·       Trump faced judicial overreach on tariffs last night

·       We're reviewing other avenues for trade policies

·       Trump has other legal authorities for tariffs

·       Trump reserves authority, such as Section 232

·       We hope Russia and Ukraine engage in direct discussions next week

·       Trump told Powell it's a mistake not to lower rates

·       Trump told Powell he's making a mistake

·       Trump thinks the bank is making a mistake by not cutting rates

·       Fed's readout of the meeting was otherwise correct, just did not mention Trump's comments to Powell

·       President Trump told the Fed chair that, by not lowering rates, the Fed is putting the US at a disadvantage against China and other countries.

·       Trump does not discuss Powell’s term.

·       Leavitt, when asked about the 90-day window: The Trade agenda is moving forward

·       The call with Japan was a good discussion

·       We expect the defense to come up at G7 with Canada

·       Trump told Canada the US is subsidizing their defense

·       We will win the trade battle in court

·       Bessent and Greer have been in touch with counterparts on tariffs following the court ruling.

·       Leavitt, when asked about US Steel: Trump is going to Pennsylvania. He will comment on US Steel on his visit.

Overall, the White House Press Secretary Karoline Leavitt has strongly criticized court rulings blocking President Trump’s tariffs, labeling them as “judicial overreach” and asserting that “courts should have no role” in tariff decisions. She specifically condemned the U.S. Court of International Trade’s May 28, 2025, ruling. Leavitt argued that Trump’s rationale for the tariffs, aimed at addressing trade deficits and drug trafficking as national emergencies, is “legally sound.” She noted that the administration filed an emergency motion for a stay with the U.S. Court of Appeals for the Federal Circuit and expressed hope that the Supreme Court will intervene to reverse the trade court’s decision, stating, “The Supreme Court must put an end to this.”

The administration contends that the ruling undermines national security and economic interests by limiting Trump’s leverage in trade negotiations. If the appeals court does not grant the stay, the administration plans to seek emergency relief from the Supreme Court as early as Friday, May 30, 2025

Additionally, Leavitt addressed economic concerns, dismissing the Congressional Budget Office’s (CBO) forecast on the tax bill as based on “shoddy” and “anemic growth assumptions,” asserting that the tax bill would not increase the federal deficit. She urged Senate Republicans to pass the tax bill to support Trump’s economic agenda. The administration’s aggressive response reflects its determination to preserve Trump’s tariff strategy, with legal experts suggesting the case could ultimately reach the Supreme Court, potentially testing conservative doctrines like the non-delegation and major questions doctrines. Alternative legal pathways, such as Section 122 of the Trade Act of 1974 or Section 301 investigations, are also under consideration to reinstate tariffs if the IEEPA-based approach fails.

Finally, late Thursday, May 29, 2025, the U.S. Court of Appeals for the Federal Circuit temporarily reinstated President Trump's "Liberation Day" tariffs, which had been previously annulled by the U.S. Court of International Trade. The appeals court's order grants an immediate administrative stay, temporarily halting the lower court's judgments and injunctions while the court reviews further motions. If the appeal had been dismissed, the Trump administration was prepared to escalate the matter to the Supreme Court. The Appellate court issued an administrative stay, stating it needs time to review filings, and the stay will remain in effect until further notice.

The Appellate Court order said: "The request for an immediate administrative stay is granted to the extent that the judgments and the permanent injunctions entered by the Court of International Trade in these cases temporarily stay until further notice while this court considers the motions papers”.

Subsequently, the White House Trade Adviser Peter has indicated that the Trump administration is actively engaging with nations following the U.S. Court of Appeals for the Federal Circuit's decision to temporarily reinstate Trump's "Liberation Day" tariffs. Navarro stated that calls from nations were received on the morning of May 30, 2025, and discussions are ongoing. He emphasized the administration's determination to pursue its trade agenda, noting that even if tariff cases are lost, they will find alternative methods to implement their policies, as suggested by the court's ruling. Navarro also mentioned that the U.S. Trade Representative (USTR) is expected to provide further updates within the next day or two.

Trump Trade Adviser Navarro:

·       We got calls from nations this morning, and discussions continue

·       You can assume that even if we lose tariff cases, we'll do it another way

·       The Court told us to go do it another way

·       We will hear in the next day or two from USTR

The White House Senior Adviser, Kevin Hassett, in a Fox News interview on May 30, 2025, discussed recent developments following the U.S. Court of Appeals for the Federal Circuit's decision to temporarily reinstate President Trump's "Liberation Day" tariffs. Hassett noted that the court's stay provides the administration with time to finalize trade deals. He revealed productive talks with India and mentioned being briefed on three imminent trade agreements, expecting deals to be concluded within the next one to two weeks. Additionally, Hassett confirmed he was present at a meeting between President Donald Trump and Federal Reserve Chair Powell. Hassett agreed with Powell's readout of the meeting, indicating alignment on the discussion's outcomes.

White House Senior Adviser Hassett:

·       We had productive talks with India

·       I have been briefed on three trade deals that are about to happen

·       I expect trade deals in the next week or two

·       Appeals Court now allows time to finish trade deals

·       I was in a meeting with Trump and Powell

·       I agree with Powell's readout of the meeting

29/05/2025

US stocks wobbled on Trump's tariff block & unblock by courts

·       Wall Street futures stumbled from Asian session high as the Trump administration has ensured a favorable tariff order from the Appellate Court  against the CIT order

·       Trump also summoned Fed Chair Powell and pressed for an immediate rate cut by June’25 (?)

·       FOMC minutes show Fed’s wait & watch stance amid lingering Trump tariff uncertainty; Fed may not cut before September’25

·       But Trump may also cut the rate from June-July’25 as Trump may have explained to him that the overall basic tariff would be 10% along with targeted sectoral tariffs.

On Wednesday, May 28, 2025, Wall Street slipped on less dovish FOMC minutes (a maximum of two rate cuts in late 2025), lingering Trump trade and tariff uncertainty, and the Trump administration’s latest salvo against China regarding the restriction of tech design. But in the early Asian Session, Thursday, Wall Street Futures surged sharply after a US trade court blocked Trump’s Liberation Day tariffs. After the Court ruling, stock futures and USD rose, reflecting relief from trade war uncertainty.

However, the appeal and potential alternative legal routes (e.g., other trade laws) suggest lingering uncertainty. UST was under stress as the court (CIT) ordered Trump (US Treasury) to refund tariffs already collected, negative for the US trade deficit. Gold slid on the fading concern of Trumpcession. But on early US Thursday, Wall Street Futures stumbled as the market realized that the Trump admin would go for a lengthy court battle and may also continue the tariff agenda; Gold again surged on lingering trade & tech war, especially with China.

NVIDIA is facing bipartisan fire for its China AI Chip factory

Nvidia is facing bipartisan criticism from U.S. Senators Jim Banks (R-Ind.) and Elizabeth Warren (D-Mass.) over its plans to establish a research facility in Shanghai, raising concerns about potential national security risks and the transfer of sensitive AI technology to China. In a letter to Nvidia CEO Jensen Huang, the senators demanded a detailed timeline and overview of the facility’s plans, including specific research initiatives and financial incentives, citing “significant national security and economic security issues.”

Nvidia clarified that the facility will only house existing employees and involve no advanced chip design transfers. However, the move comes amid heightened U.S. scrutiny of tech ties with China, especially as both the Trump and Biden administrations have tightened export controls on Nvidia’s AI chips, which generated $17 billion (13% of total sales) from China last fiscal year. Huang has argued that restricting exports could accelerate China’s AI development, emphasizing the importance of engaging with one of the world’s largest AI markets, and now China contributes almost 50% of AI researchers alone. Restricting techs to China will motivate them more to produce domestically.

This scrutiny aligns with broader efforts to curb China’s access to advanced U.S. technology. For instance, lawmakers like Representatives John Moolenaar and Raja Krishnamurthy have pushed for export controls on Nvidia’s H20 chip, used by Chinese AI firm DeepSeek, and proposed legislation to track AI chip locations to prevent smuggling. Warren Elizabeth has also urged the Commerce Department to block Nvidia’s H20 exports, citing national security risks and potential undue influence from a meeting between Huang and President Trump. These developments reflect ongoing tensions between U.S. national security priorities and Nvidia’s business interests in China.

On May 29, 2025, Peter Navarro, a senior trade adviser to President Trump, commented on a trade court ruling during an interview, stating that the Trump administration was not surprised by the decision. Navarro emphasized that "nothing has changed" despite the ruling, asserting that the administration has a strong case and multiple options on the table to advance its trade agenda. He described the situation as an "economic emergency," criticizing the judiciary for obstructing Trump's policies, claiming that "courts are getting in the way of the Trump agenda." Navarro's remarks reflect his continued defense of the administration’s aggressive tariff policies, which have sparked significant market volatility and debate.

White House economic advisor Peter Navarro on Bloomberg:

·       There is no question, this is an economic emergency.

·       The Trump administration is not surprised by the trade court ruling

·       CBO is historically bad at estimating tax bills

·       The Trump administration has many options for trade

·       Courts are getting in the way of the Trump agenda

·       Trade deals are going to happen

·       Navarro on trade court ruling: Nothing has changed

Meanwhile, Kevin Hassett, Director of the National Economic Council, stated on Fox News that the court decision striking down the Trump administration's global tariffs will likely be overturned on appeal. He emphasized that the ruling won't impact ongoing trade negotiations and that the administration has alternative options to enforce its trade policy. Hassett also mentioned that three trade deals are nearly finalized, pending approval from President Trump, with more agreements expected soon.

The Trump administration is actively responding to the U.S. Court of International Trade ruling that blocked most of President Trump’s tariffs, deeming them an overreach of executive authority under the International Emergency Economic Powers Act (IEEPA). The administration has filed an appeal with the U.S. Court of Appeals for the Federal Circuit, requesting a stay to keep the tariffs in place during the appeals process, arguing that the ruling "jeopardizes ongoing negotiations with dozens of countries" by undermining the president’s leverage in trade talks.

Additionally, the Trump administration may ask the Supreme Court as early as Friday, May 30, 2025, to intervene and maintain the tariffs, reflecting a strategy to preserve their trade policy. The White House has criticized the ruling, with spokesperson Kush Desai asserting that trade deficits constitute a national emergency and that “unelected judges” should not dictate responses to such crises. The case could ultimately reach the Supreme Court, especially given the lack of precedent on IEEPA’s use for tariffs and the administration’s claim of executive flexibility. However, the ruling does not affect sector-specific tariffs (e.g., on autos, steel, and aluminum) imposed under other statutes like Section 232 of the Trade Expansion Act, which remain intact.

The Trump administration is poised to escalate its legal battle over tariffs by potentially requesting emergency relief from the U.S. Supreme Court as early as Friday, May 30, 2025, to pause a U.S. Court of International Trade ruling that blocked most of President Trump’s global tariffs. The administration swiftly appealed to the U.S. Court of Appeals for the Federal Circuit and has indicated it will seek Supreme Court intervention if the appeals court does not grant a stay to keep the tariffs in place during the appeal process.

The Justice Department argues that the ruling undermines national security and economic interests by weakening the president’s leverage in trade negotiations. White House officials, including spokesperson Kush Desai, have criticized “unelected judges” for interfering with Trump’s agenda, while trade adviser Peter Navarro expressed confidence in overturning the ruling, citing alternative legal pathways like Section 122 of the Trade Act of 1974 or Section 301 investigations. The case’s outcome could significantly impact Trump’s trade war strategy, with markets reacting cautiously to the ongoing uncertainty.

On May 29, 2025, Federal Reserve (Fed) Chair Powell met with President Trump at the White House to discuss economic developments, including growth, employment, and inflation. According to the Federal Reserve’s official statement, Powell did not share expectations for future monetary policy during the meeting, emphasizing that policy decisions would be driven by incoming economic data and its implications for the economic outlook. Powell reaffirmed that he and the Federal Open Market Committee (FOMC) would set monetary policy independently, guided by the Fed’s mandate to support maximum employment and stable prices, and based on objective, non-political analysis. This meeting follows reports of Trump’s push for greater influence over Fed policy, including a suggestion that Powell consult with him on interest rate decisions, which raised concerns about central bank independence.

Fed Statement on Chair Powell's meeting with the President on May 29, 2025

“At the President's invitation, Chair Powell met with the President today at the White House to discuss economic developments, including growth, employment, and inflation.

Chair Powell did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook.

Finally, Chair Powell said that he and his colleagues on the FOMC will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective, and non-political analysis.”

On May 29, the White House Press Secretary Leavitt said:

·       We hope the Supreme Court will weigh in

·       DC judge ruled against Trump's tariff power

·       The US is fighting a block in the trade court

·       There will be no increase in the deficit from the tax bill

·       CBO's forecast makes anaemic growth assumptions

·       CBO tax bill estimate is a shoddy assumption

·       Senate Republicans should pass the tax bill

·       The US filed an emergency motion for a stay

·       The Supreme Court must put an end to this

·       The trade court abused judicial power

·       Courts should have no role in tariffs

·       Trump's rationale is legally sound

·       Trump faced judicial overreach on tariffs last night

·       We're reviewing other avenues for trade policies

·       Trump has other legal authorities for tariffs

·       Trump reserves authority, such as Section 232

·       We hope Russia and Ukraine engage in direct discussions next week

·       Trump told Powell it's a mistake not to lower rates

·       Trump told Powell he's making a mistake

·       Trump thinks the bank is making a mistake by not cutting rates

·       Fed's readout of the meeting was otherwise correct, just did not mention Trump's comments to Powell

·       President Trump told the Fed chair that, by not lowering rates, the Fed is putting the US at a disadvantage against China and other countries.

·       Trump does not discuss Powell’s term.

·       Leavitt, when asked about the 90-day window: The Trade agenda is moving forward

·       The call with Japan was a good discussion

·       We expect the defense to come up at G7 with Canada

·       Trump told Canada the US is subsidizing their defense

·       We will win the trade battle in court

·       Bessent and Greer have been in touch with counterparts on tariffs following the court ruling.

·       Leavitt, when asked about US Steel: Trump is going to Pennsylvania. He will comment on US Steel on his visit.

Overall, the White House Press Secretary Karoline Leavitt has strongly criticized court rulings blocking President Trump’s tariffs, labeling them as “judicial overreach” and asserting that “courts should have no role” in tariff decisions. She specifically condemned the U.S. Court of International Trade’s May 28, 2025, ruling. Leavitt argued that Trump’s rationale for the tariffs, aimed at addressing trade deficits and drug trafficking as national emergencies, is “legally sound.” She noted that the administration filed an emergency motion for a stay with the U.S. Court of Appeals for the Federal Circuit and expressed hope that the Supreme Court will intervene to reverse the trade court’s decision, stating, “The Supreme Court must put an end to this.”

The administration contends that the ruling undermines national security and economic interests by limiting Trump’s leverage in trade negotiations. If the appeals court does not grant the stay, the administration plans to seek emergency relief from the Supreme Court as early as Friday, May 30, 2025

Additionally, Leavitt addressed economic concerns, dismissing the Congressional Budget Office’s (CBO) forecast on the tax bill as based on “shoddy” and “anemic growth assumptions,” asserting that the tax bill would not increase the federal deficit. She urged Senate Republicans to pass the tax bill to support Trump’s economic agenda. The administration’s aggressive response reflects its determination to preserve Trump’s tariff strategy, with legal experts suggesting the case could ultimately reach the Supreme Court, potentially testing conservative doctrines like the non-delegation and major questions doctrines. Alternative legal pathways, such as Section 122 of the Trade Act of 1974 or Section 301 investigations, are also under consideration to reinstate tariffs if the IEEPA-based approach fails.

Finally, late Thursday, May 29, 2025, the U.S. Court of Appeals for the Federal Circuit temporarily reinstated President Trump's "Liberation Day" tariffs, which had been previously annulled by the U.S. Court of International Trade. The appeals court's order grants an immediate administrative stay, temporarily halting the lower court's judgments and injunctions while the court reviews further motions. If the appeal had been dismissed, the Trump administration was prepared to escalate the matter to the Supreme Court. The Appellate court issued an administrative stay, stating it needs time to review filings, and the stay will remain in effect until further notice.

The Appellate Court order said: "The request for an immediate administrative stay is granted to the extent that the judgments and the permanent injunctions entered by the Court of International Trade in these cases temporarily stay until further notice while this court considers the motions papers”.

Subsequently, the White House Trade Adviser Peter has indicated that the Trump administration is actively engaging with nations following the U.S. Court of Appeals for the Federal Circuit's decision to temporarily reinstate Trump's "Liberation Day" tariffs. Navarro stated that calls from nations were received on the morning of May 30, 2025, and discussions are ongoing. He emphasized the administration's determination to pursue its trade agenda, noting that even if tariff cases are lost, they will find alternative methods to implement their policies, as suggested by the court's ruling. Navarro also mentioned that the U.S. Trade Representative (USTR) is expected to provide further updates within the next day or two.

Trump Trade Adviser Navarro:

·       We got calls from nations this morning, and discussions continue

·       You can assume that even if we lose tariff cases, we'll do it another way

·       The Court told us to go do it another way

·       We will hear in the next day or two from USTR

The White House Senior Adviser, Kevin Hassett, in a Fox News interview on May 30, 2025, discussed recent developments following the U.S. Court of Appeals for the Federal Circuit's decision to temporarily reinstate President Trump's "Liberation Day" tariffs. Hassett noted that the court's stay provides the administration with time to finalize trade deals. He revealed productive talks with India and mentioned being briefed on three imminent trade agreements, expecting deals to be concluded within the next one to two weeks. Additionally, Hassett confirmed he was present at a meeting between President Donald Trump and Federal Reserve Chair Powell. Hassett agreed with Powell's readout of the meeting, indicating alignment on the discussion's outcomes.

White House Senior Adviser Hassett:

·       We had productive talks with India

·       I have been briefed on three trade deals that are about to happen

·       I expect trade deals in the next week or two

·       Appeals Court now allows time to finish trade deals

·       I was in a meeting with Trump and Powell

·       I agree with Powell's readout of the meeting

On May 28, apart from ongoing Trump tariff uncertainty, some focus of the market was also on minutes of the FOMC meeting May 6–7, 2025:

·       Participants agreed they were well-positioned to wait for more clarity on the outlook

·       Participants agreed that the risk of higher inflation and higher unemployment had risen

·       Participants agreed that uncertainty about the outlook had increased, and it was appropriate to take a cautious approach to monetary policy.

·       Participants noted they may face difficult tradeoffs if inflation proves more persistent while outlooks for growth and employment weaken.

·       Almost all participants commented on the risk that inflation could prove more persistent than expected.

·       Participants saw uncertainty about their economic outlooks as unusually elevated.

·       Staff projections for 2025 and 2026 were weaker than their estimate at the March meeting.

·       Participants noted that a durable shift in such correlations or a diminution of the perceived safe-haven status of US assets could have lasting implications for the economy.

·       Some participants commented on changes in typical correlations across asset prices in the first half of April.

·       The committee voted to renew dollar and foreign currency swap lines

·       Staff cited tariff policies as implying a larger drag on activity than policies they had assumed in their prior forecast

·       Fed is well-positioned to wait for more clarity on inflation/economy

·       Fed worried it could face 'difficult tradeoffs' if tariffs aggravate inflation, minutes show

·       Fed expects 1-2 rate cuts by the end of 2025

·       The Fed is waiting for more clarity before concrete monetary policy decisions

·       The modal implied policy path based on options prices, which is a proxy for market baseline policy expectations, moved down some over the period and was consistent with either one or two 25 basis point rate cuts by the end of the year, only slightly more than at the time of the March FOMC meeting

·       FOMC noted that the Trump administration's tariff announcements in April led to a significant deterioration in global risk sentiment, which was largely reversed after the measures were paused to allow for trade negotiations

·       President Trump's trade policies resulted in the weakening of the staff projection for real GDP growth in 2025 and 2026

Summary of FOMC Minutes: The Federal Open Market Committee meeting minutes from the May 6-7, 2025, meeting reveal that the Federal Reserve (Fed) holds the rate for the third consecutive meeting, reflecting a cautious approach amid economic uncertainties. The minutes underscore a vigilant, wait-and-see strategy as the Fed navigates inflation, labor market dynamics, and external factors like tariffs.

Economic Outlook: Economic activity continued to expand at a solid pace, though net export swings impacted data. The unemployment rate remained low and stable, but inflation showed slight increases, with risks of persistence noted by nearly all participants.

Policy Stance: The FOMC unanimously agreed to hold rates steady, emphasizing a data-dependent approach. Officials highlighted potential trade-offs if inflation persists while the labor market weakens.

Inflation and Risks: Concerns were raised about upside inflation risks, partly due to potential tariff impacts, which could slow growth, raise prices, and affect jobs.

Cautious Approach: The Fed stressed the need for caution in quantitative easing (QE) and monetary policy adjustments, awaiting further data to guide future decisions.

NY Fed turned cautious: We will start morning standing repo facility operations on June 26th between 8:15-8:30 AM ET. We will maintain afternoon standing repo facility offerings.

Highlights of Fed Survey: Federal Reserve Board issues Economic Well-Being of U.S. Households in 2024 report

·       Perceptions of local and national economies improved in 2024 but were still a net negative.

·       In 2024, 29% said the economy was good or excellent, down from 2019's 50%

·       In 2024, 60% said price changes made the financial situation worse, vs 65% in 2023

·       In 2024, 79% said they changed their behavior in response to higher prices

·       In 2024, 63% said they could cover a $400 emergency with cash or equivalent, little changed from 2023

On May 29, 2025, Chicago Fed President Goolsbee suggested that if tariffs are avoided through a deal or other means, it could create conditions for interest rates to decrease. This statement aligns with broader economic discussions about trade policies impacting inflation and monetary policy.

Fed's Goolsbee:

·       If tariffs are avoided by a deal or otherwise, we could return to a situation where rates can come down.

·       This is a stagflationary direction, but it's not stagflation.

·       Stagflation is the toughest scenario for a central bank. That's not what we are facing now.

·       This court ruling may extend uncertainty

·       The administration could use other justifications to impose tariffs.

·       If the court ruling on tariffs leads to further extension of uncertainty, that would be more negative

On May 29, 2025, SF Fed’s President Daly expressed a cautiously optimistic outlook on the U.S. economy. She reiterated that the labor market remains solid despite slowing, and the Fed expects to continue reducing inflation toward its 2% target, though not within 2025, as previously noted. Daly emphasized the Fed’s ability to manage monetary policy as needed, reflecting confidence in navigating economic challenges. She also highlighted that deregulation and tax relief are generally positive for economic growth, aligning with the broader context of the Trump administration’s trade policies, including the temporary reinstatement of the "Liberation Day" tariffs by the U.S. Court of Appeals for the Federal Circuit. These comments follow her earlier remarks about a "wait and see" approach to the tariffs’ uncertain scope, size, and timing.

Fed's Daly:

·       Bond yields show the markets are trying to process uncertainty about policy and the economy.

·       Fed policy is in a good place. The US economy is in a good place

·       Workers are worried about inflation

·       I'm seeing the balance in the labor market we need for 2% inflation

·       We're making progress on inflation

·       We won't get to 2% inflation this year

·       Workers are worried about inflation

·       The labor market is in solid shape

Conclusions

Despite the lower court blocking Trump's tariffs, the Trump admin has ensured an easy stay from the US Appellate Court and continued its tariff & trade deal agenda to get a favorable trade deal for US exports and to reshore US manufacturing as much as possible and feasible. Fed is now waiting for early July and August (90-day windows) for a definitive clue about Trump tariffs trajectory, which would be a minimum of 10% on all countries with some sectoral 20%-25% (automobiles, metals, pharma). Trump may not afford to impose 20% tariffs on Chinese goods as it will be ultimately borne by Americans and may erode his vote bank, and also the net bank if US corporations are not allowed to increase their prices.

Trump may soon withdraw his 20% Fentanyl levy on China, and the US will continue 10% universal tariffs on all and sectoral higher tariffs of 25% on metals, automobiles, and pharmaceuticals, along with selected exemptions. But even at around 15%-20% weighted average tariffs, it’s still substantially higher than the 2.5% prior, which will inevitably cause a higher cost of living for Americans, subdued discretionary consumer spending, tepid private capex, higher unemployment, and lower economic growth. In other words, the US economy may be heading for a stagflation-like scenario in the coming days unless there is a corresponding increase in real income along with productivity.

Trump, the tariff Man and Deal Maker, is set to extend his tariff pause from July-August to at least December’25 or even permanently, depending upon the ongoing trade deal negotiations status. Trump is bound to scale back his higher reciprocal tariffs, leaving only 10% universal basic tariffs along with selected sectoral tariffs like on metals, automobiles, semiconductors (chips), and pharmaceuticals for the sake of so-called national security to ensure US manufacturing.

If Trump goes on with his higher reciprocal tariffs, it would cause a supply shock and a higher cost of living for ordinary Americans, most of whom live on a pay check to paycheck-to-paycheck basis. Further, such tariffs would cause a demand shock in the future and an all-out recession. This will also cause a loss of Vote Bank (ordinary Americans) and Note Bank (political funding by corporate America) for Trump and Republicans. Thus court or no court, Trump is bound to blink and current legal issues may be a wonderful opportunity for Trump for a face-saving exit after December’2025, well before the November’26 US mid-term election to save his Trifecta (White House, House, and Senate majority); but it may be a distinct possibility.

Bottom line

Fed may not cut in June’25 amid lingering Trump tariff talk uncertainty, but may act in September’25 and December’25 depending upon Trump’s implemented tariffs and overall US economic situation.

Trump may extend his reciprocal tariffs pause from July-August to December’25 to ensure no supply shock for the US economy. Trump will use the US adverse court ruling as an excuse for a face-saving exit from his tariff mess. Trump may continue his chaotic tariff policy to get a fair trade deal for the US. Powell may even start to cut from June’25 rather than September under Trump pressure. Trump may have explained to Powell that he would ensure 10% basic universal tariffs with selected sectoral tariffs after ensuring a better trade deal for the US, along with reshoring US manufacturing as much as possible & feasible. Thus Fed may start cutting rates again from June-July ’25 as best best-case scenario against September-December ’25 as the base case scenario.

Market wrap:

On Thursday, May 29, 2025, Wall Street Future stumbled from Asian Session tariff stay high on renewed concern of Trump tariff tantrum as it becomes clear that the Trump admin will appeal to the US as soon as Friday and may also get an immediate stay on the CIT order (blocking of Trump tariffs). Gold, UST recovered, while USD, stocks slipped on renewed concern of Trump tariff chaos. Also, US Q1 GDP growth was revised higher at -0.2% against an earlier estimate of -0.3%, while US core PCE prices were revised lower to 3.4% from an earlier 3.5%, negative for USD. This, along with Trump’s unexpected ‘invitation’ to Fed chair Powell (Mr. Late), the market is now expecting a lower CORE PCE inflation reading in Q2.

Eventually, on Thursday, May 30, 2025, U.S. stock markets closed in the green on lingering uncertainty about the Trump tariff tantrum. NVIDIA and Boeing's optimism helped. Nvidia surged after reporting strong quarterly sales driven by robust AI chip demand, despite a guidance warning of an $8 billion sales hit in the next quarter due to U.S. export restrictions on China and growing bipartisan scrutiny of its China venture. Boeing also jumped following CEO Kelly Ortberg’s announcement to increase 737 MAX production to 42 jets per month in the coming months, with plans to reach 47 by early 2026, mainly to supply China. Best Buy plunged after the retailer issued subdued guidance, citing tariff-related concerns affecting consumer demand for big-ticket items.

However, gains were tempered by renewed trade policy uncertainty after the U.S. Court of Appeals for the Federal Circuit temporarily reinstated Trump’s tariffs, which had been blocked by the U.S. Court of International Trade for being unlawfully imposed. This legal back-and-forth, combined with concerns about tariff impacts, contributed to market volatility.

Dow 30 (DJ-30) was boosted by Boeing, NVIDIA, Amgen, Chevron, Visa, P&G, American Express, Caterpillar, 3M, Coca-Cola,  and Amgen, while dragged by Salesforce, IBM, Goldman Sachs, Nike, Cisco, McDonald’s, Apple, and Walmart.

Weekly-Technical trading levels: DJ-30, NQ-100, and Gold

Looking ahead, whatever the fundamental narrative, technically Dow Future (CMP: 41400) now has to sustain over 41800 for a further rally towards 42000/42500-43000/43300* and 43500*, and even 44600-45200 in the coming days; otherwise sustaining below 41700, DJ-30 may again fall to 41000/40600-4010039900 and 39700/38600-38000/37700-37300/37000 in the coming days.

Similarly, NQ-100 Future (20200) has to sustain over 20800 for a further rally to 21100/21400-21700*/22000* and 22400-22600 in the coming days; otherwise, sustaining below 20750/20600-20500/20400, NQ-100 may again fall to 20000/19600-19400/19200 and 19100/18800-18600/18000-17600/16400 and 16200-15800 in the coming days.

Also, technically Gold (CMP: 3240) has to sustain over 3275-3300 for any recovery to 3325/3375* and 3400/3425-3450/3505*, and even 3525/3555 in the coming days; otherwise sustaining below 3290-3275, Gold may again fall to 3255/3225-3200/3165* and further to 3130/3115*-3075/3015-2990/2975-2960*/2900* and 2800/2750 in the coming days.