Trump: Treasury Secretary Becerra understands the market; as soon as he appears on TV, everything has to rise.

Trump commented on the US stock market on Tuesday and Wednesday, but it did not trigger the pump effect seen earlier when the market was at a low.

Written by: He Hao

Source: Wall Street Journal

On Wednesday, U.S. President Trump commented on the market again. He stated that U.S. Treasury Secretary Mnuchin is doing well, the numbers make him look better, he understands the market, and as soon as Mnuchin appears on TV, everything has to pump.

Trump talks about Treasury Secretary Bessent's speech / the effect of public appearances on the market. After Trump's remarks, U.S. stocks saw a slight pump in the short term, maintaining their intraday upward trend. So far, U.S. stocks have risen for three consecutive trading days. The dollar / Swiss franc has risen by 0.5% today, reported at 0.843.

Bescent spoke about trade negotiations on that day.

In addition, media reports on Wednesday cited informed sources saying that the United States will not seek a devaluation of the dollar in the trade agreement. Treasury Secretary Becerra is the only member responsible for handling these issues and has not delegated others for currency policy consultations; negotiations can only take place when Becerra is present. The dollar index briefly rose about 20 points, above 101, turning overall positive for the day.

Trump Recently Frequently Comments on the Market

The significant rebound of the US stock market since early April highlights the "major buying opportunity" effect touted by Trump on April 9. Looking back at the performance of the US stock market over the past few months, Trump's speeches have had a substantial impact on the market:

In early April, according to CCTV News, the United States implemented a 10% universal tariff and tariffs on specific industries such as automobiles, steel, and aluminum, causing the S&P 500 index to drop nearly 19% from its peak in February. Subsequently, after Trump stated on April 9 that "now is a good time to buy," a few hours later, he announced a pause on some tariffs, leading to a significant rebound of over 16% in the US stock market that month.

Trump said on May 8 that if a trade deal combined with tax cuts could bear fruit, "you'd better go out and buy stocks now."

This Tuesday, as the S&P 500 index regained its losses for the year, Trump stated that a month ago, companies were dissatisfied with me, but as the market has risen, their attitudes have changed. The market rise is truly wonderful. It will continue to rise, and rise much higher.

However, it is important to note that Trump's comments on the U.S. stock market on Tuesday and Wednesday did not trigger the pump effect that the U.S. stock market experienced previously at low levels. On Wednesday, the S&P 500 index only barely rose slightly.

Bescent recently spoke out

1. Strenuously promoting the long-term growth potential of the U.S. economy to investors

On May 5, local time, in the face of market turmoil and the international community's doubts about the United States, Bessent vigorously promoted the long-term growth potential of the U.S. economy to investors, urging them to bet on America and rebutting the theme of "selling America." Bessent stated:

The trade, tax cuts, and deregulation of the Trump administration's economic agenda are not independent policies, but rather "interlocking components of an engine," aimed at promoting long-term investment in the U.S. economy and making the U.S. more attractive to investors; the U.S. market has "anti-fragile" characteristics, rebounding after past shocks such as financial crises; by this time next year, U.S. GDP growth may approach 3%.

2. Believe the Federal Reserve should cut interest rates, but should not fire Powell

On May 1, local time, Besant echoed Trump's stance, believing that the Federal Reserve should cut interest rates:

The U.S. Treasury market is signaling that the Federal Reserve should cut interest rates. We see that the two-year Treasury yield has fallen below the federal funds rate. This suggests that the market believes the Federal Reserve should consider lowering rates.

Despite differing from Powell's stance, Bentsen caused Trump to change his mind and no longer express a desire to fire Powell. In late April this year, Trump, who had repeatedly stated he wanted to fire Powell, publicly declared that he did not plan to dismiss Powell and accused the media of misrepresenting his intentions. Reports suggest that part of the reason for Trump's change of heart was due to warnings from Treasury Secretary Bentsen and Commerce Secretary Lutnick, who privately cautioned Trump that firing Powell could trigger market turmoil and legal disputes.

3. Tariff Statement

According to the Global Times, Bessent and Trump’s trade and manufacturing senior advisor Navarro had an argument in the office of White House Chief of Staff Susan Wiles in late March. Navarro advocated for a comprehensive 25% tariff on $3 trillion worth of imports, while Bessent, a former Wall Street investor, warned that this move would trigger market turmoil and outlined various risk scenarios. Intense rhetoric continued to emerge.

Boosted by the "90-day suspension," U.S. stocks surged on April 9, marking a significant turning point for the market. Media reports revealed that Bessent was behind Navarro's "tactical diversion," leading Trump to feel that the decision was "set in stone." On the morning of April 9, when Navarro was scheduled to meet with economic advisor Hassett in another location at the White House, Bessent and Lutnick quickly headed to the Oval Office to propose a suspension of some tariffs to Trump, and then publicly announced the news right outside the White House.

Besenet stated at a closed-door investor meeting on April 22 that the tariff stalemate is unsustainable and that the situation is expected to ease in the near future. This statement from Besenet significantly boosted market risk sentiment.