At an economic forum in Chicago on Wednesday evening, Federal Reserve Chair Jerome Powell warned that the central bank may be less agile in delivering swift support to the economy as it absorbs the fallout from President Donald Trump’s escalating trade war. Powell noted a strong likelihood that consumers will face sharply higher prices and that the economy may experience a rise in unemployment due to near-term tariff shocks. This, he said, presents a "challenging scenario" for the FED, as any policy move to address inflationary pressure could risk exacerbating job losses - and vice versa. Powell also signaled that the FED may prioritize inflation control over labor market support should the two objectives come into conflict, while reaffirming the central bank’s commitment to balancing both mandates. Meanwhile, Federal Reserve Governor Christopher Waller - widely expected to succeed Powell as FED Chair in February 2026 - commented that the inflationary impact of tariffs may prove transitory, as the ensuing economic downturn would likely make sustained price pressures difficult to maintain. In a scenario where the trade war continues to escalate and poses a recessionary threat, Waller expressed support for earlier and more aggressive rate cuts compared to previous easing cycles.
The USD continued to weaken on Wednesday, falling 0,82% as markets awaited clarity on whether the Trump administration will reach new trade agreements with key partners. The USD/VND interbank exchange rate remained broadly stable around 25.850 during the day, with cautious sentiment continuing to dominate domestic market behavior. Year-to-date, the exchange rate has increased approximately 1,37%, while the USD has declined by nearly 8,4% against a basket of major currencies. The rate is expected to remain in the 25.800 - 25.900 range in today’s session.
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