Donald Trump has backed off his threats to sack Fed chair Jerome Powell. His Treasury Secretary, Scott Bessent, flew a white flag in the trade clash with China. Elon Musk said he’d wind down the time devoted to slashing his way through America’s civil administration as Tesla’s profits crashed. It wasn’t a great day for the MAGA crew.

Tuesday was, however, a good day for financial markets, which have been ravaged by the Trump administration’s destructive rampage through America’s agencies, institutions and trade settings, with the sharemarket bouncing back, bond yields easing and the US dollar pausing its months-long dive.

Elon Musk has said he’d spend less time on being Donald Trump’s government efficiency attack dog. Credit: Alex Brandon/AP

For almost a week, Trump had been bashing the Federal Reserve Board chair after Powell said last week that Trump’s tariffs were likely to lead to higher US inflation, lower economic growth and higher interest rates than might otherwise have been the case.

Where previously Trump said Powell’s “termination” couldn’t come quickly enough, and his advisers admitted the administration was looking at ways to sack him before his term as Fed chairman expired next May, Trump – after days of tumbling share and bond prices and a sinking US dollar – says he has “no intention” to fire him.

While Trump was dousing that fire, Bessent tried to hose down another.

Bessent told a group of investors that the trade stand-off with China was unsustainable and that both countries would have to find ways to de-escalate the confrontation in the very near future. He described the current situation as a trade embargo and said it wasn’t a US goal to decouple from China. That would be news to China.

Subsequently, according to Bloomberg, Trump said the United States was “doing fine” with China, that he didn’t expect a “hardball” negotiation and would be “very nice” to China, and that China would ultimately have to make a deal.

’I’m not going to say, ‘Oh I’m going to play hardball with China’. We’re........

© Brisbane Times