WSJ What’s News - ‘Sell America’ Trade Picks Up After New Trump Threats on Fed

Episode Date: April 21, 2025

P.M. Edition for April 21. U.S. markets were on edge about President Trump's tariff war as well as his threats to fire Federal Reserve chief Jerome Powell. Stocks fell, the dollar hit fresh multiyear lows against major currencies, and yields on longer-term Treasurys rose. Plus, U.S. megabanks are built for business from all corners of the globe. Heard on the Street columnist Telis Demos says that will become tougher in a deglobalized world. And cryptocurrency is pushing deeper into the banking system; banking reporter Gina Heeb has the scoop on the crypto firms planning to apply for bank charters or licenses. Pierre Bienaimé hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Okay, Martin, let's try one. Remember, big. You got it. The Ford It's a Big Deal event is on. How's that? Uh, a little bigger. The Ford It's a Big Deal event. Nice. Now the offer? Lease a 2025 Escape Active all-wheel drive from 198 bi-weekly at 1.99% APR for 36 months with $27.55 down. Wow, that's like $99 a week.

Yeah, it's a big deal. The Ford It's a Big Deal event. Visit your Toronto area Ford store or Ford.ca today. US markets fall as President Trump renews his attacks on the Federal Reserve. Plus how American megabanks may become collateral damage to a global trade war. You could see countries saying, you know what, this is how we're going to fight this trade war. You've got to stop doing business with an American bank today. And why cryptocurrency firms want to start acting like banks. It's Monday, April 21st. I'm Pierre Bienemay for The Wall Street Journal, filling in for Alex Osila.

This is the PM edition of What's News, the top headlines and business stories that moved the world today. The sell-America trade picked back up today. U.S. stocks fell. The dollar hit fresh multi-year lows against major currencies. Yields on longer-term treasuries rose, and gold surged to another record high. Markets are on edge about President Trump's tariff war as well as his threats to fire Fed Chief Jerome Powell. In a post on social media today, Trump demanded lower rates, saying costs are trending downward and the economy could slow, quote, unless Mr. Too Late, a major loser, lowers interest

rates now. The Dow dropped almost 1,000 points. The index is on pace for its worst April since 1932. The Nasdaq took the biggest hit, falling around 2.6%. Big tech shares fell, with Nvidia and Tesla leading the losses. The S&P 500 closed down about 2.4%. While the U.S. imports more manufactured goods than it exports, it runs a big surplus in one notable business, financial services.

According to Dealogic, last year U.S. banks grabbed the top five spots for investment banking revenue worldwide and were seven of the top ten. So when it comes to a global trade war, US mega banks could become collateral damage. Heard on the street columnist, Telus Deimos has the story. So Telus, how is it exactly that American banks could lose out on business overseas? Well, the de-globalization that is part of the Trump administration's agenda would like to see more activity reshored in the US. That means that maybe there are fewer kind of truly multinational companies, right? There are companies that produce

things in the US and they sell it to Americans. There are companies that produce things in Europe and sell it to Europeans. In a world in which more companies are like that, there is maybe less of a need for a multinational bank that can help facilitate that sort of thing. Now, that doesn't happen overnight, but in the long run in a de-globalized world, US banks are going to ultimately find themselves in the crosshairs. Jamie Dimon, the chief executive of JP Morgan Chase, used that word, right? He said, we will be in the crosshairs. That's what's going to happen. Some clients or some countries will feel differently about American banks and will just have to deal with that.

You mentioned that this isn't a process that will happen overnight. What kind of resilience might US banks enjoy? US banks are still going to be, for now, the first call for a lot of international companies when they run into trouble. So if US companies are having to rewire themselves for tariffs that are coming in the short term, they are probably calling the same bank they bank with today, which might be an American bank and saying, Hey, we were getting this from China, can we get this from somewhere else? But until we start to see people really settling in and betting in for a long term kind of change in tariff policy, you will

probably still see short term defensive tactical things that companies are doing, and that probably plays into the hands of their existing partners, which are U.S. banks. HOFFMAN And who would maybe pick up the pieces of this global market share for underwriting for all kinds of financial services and banking? BUCK There was an interesting report that came out recently. The former head of the European Central Bank, Mario Draghi, put together a lot of ideas that have been bubbling around in the European Union for a long time, and among them is of how to strengthen that union, and one of them is to improve the depth and kind of

diversity of Europe's markets for companies raising money, right? Like today, a lot of European companies, if they want to get a bank loan, they go to their local bank. If they want to borrow from investors, they go through a US bank. A, that's because US banks are the biggest capital markets banks in the world, but B, because they can go to the US market, right? They can sell bonds in the US, they can go public in the US, things like that. But what Mario Draghi's message was that Europe needs to get its act together and start to develop more of those muscles and abilities. And so if Europe really gets its act together and says, okay, let's deepen and improve our banking and capital markets, maybe European banks re-emerge as like domestic champions. That doesn't mean that they're

going to necessarily become top investment banks in other parts of the world, but maybe just domestically, they will begin to take up more of that business. Heard on the street columnist, Telus Deimos. Telus, thanks so much. Thanks for having me. Meanwhile, preliminary trade data out of South Korea suggests that the effects of President Trump's new tariffs are starting to be felt across the world. In the first 20 days of April, exports fell 5.2% from a year earlier., imports plunged 12%, leading to a trade deficit. While South Korean exports to Europe continued to grow in the first few weeks of April, those to the U.S. and China declined. The data from its customs office came as Seoul gears up for high-level tariff negotiations

in Washington this week. Coming up, why crypto firms are looking to act more like banks. That's after the break. week. We exclusively report that a host of crypto firms, including Circle and Bitgo, plan to apply for bank charters or licenses. That's according to people familiar with the matter. Other people said the crypto exchange Coinbase Global and stablecoin company Paxos are considering similar moves. That comes as the Trump administration seeks to incorporate crypto into mainstream finance. Gina Hebe is a banking reporter for the Wall Street Journal and she joins me now.

Gina what is it that crypto companies want to achieve here by getting a license or a charter? We have an administration that has taken an incredibly friendly stance toward crypto. Trump has promised to make America a Bitcoin superpower. So with that, a lot of deregulation in this space is expected. And then at the same time, we also have the stablecoin bill moving through Congress that would require certain licenses or charters to issue stablecoin. So some of these companies are trying to get ahead of that and positioning themselves to get these more narrow stablecoin licenses. But at the same time

when you have deregulation in the banking space, some of them are considering going after a full bank charter that would allow them to issue stablecoin and then in addition expand their opportunity for customers. They could start taking deposits or start making loans if they were to get a bank charter as well. And what are banks themselves doing in response to this possibility of crypto cutting in on their business?

Some banks are trying to play catch up a bit here because a couple of years ago we of course had the collapse of FTX and a couple of very crypto friendly banks that also went down and the traditional finance world really stepped away from crypto in the aftermath of that and especially banks which are highly regulated and we're getting informal warnings from regulators to stay away from this space after all of that happened. So now some of them are coming back because of this more friendly regulatory approach

and because crypto is increasingly being seen as a potential competitor to them. So they are looking to expand crypto services such as custody in this space or even partnering with crypto firms to just try to catch up and make sure they can stay competitive in a payments landscape. That was Wall Street Journal banking reporter Gina Hebe. Gina, thanks so much. Thank you for having me. In other news, the Justice Department is urging a federal judge to force Google to sell its

Chrome web browser, loosening the company's grip on the search engine market. U.S. District Judge Ahmet Mehta ruled last year that Google has illegally maintained a monopoly in online search, and he has set aside three weeks to hear arguments and testimony over what remedy he should impose to restore competition. Google has long argued that it competed fairly to achieve its success, and has told Meta that the Justice Department's remedy's proposal will hinder innovation and harm consumers. News Corp, owner of the Wall Street Journal, has a commercial agreement to supply content on Google platforms.

And Russia said today it was pleased with a Trump administration proposal to bar Ukraine from joining the North Atlantic Treaty Organization. But Moscow remains uncommitted to reaching a quick deal to end its war in Ukraine. Russia has long claimed that Ukraine joining NATO is unacceptable, viewing it as a direct threat to its security and an encroachment into what it considers its sphere of influence. The US is awaiting Kiev's response, expected during a meeting with Ukrainian and European officials in London later this week. Ukrainian President Volodymyr Zelenskyy said today his country was ready to move constructively

toward an end to the conflict. Nuclear power is making a comeback, driven by the growing energy demands of artificial intelligence. And AI itself could help better manage the nuclear plants that, in turn, contribute to powering it. The Energy Department's Argonne National Laboratory, based in Illinois, has developed an AI-based tool that can help operators run plants and assist with reactor design. AI reporter Belle Lin told our Tech News Briefing podcast that Argonne wants to offer the tool

for new tech forward nuclear companies like the Bill Gates founded TerraPower or the Sam Altman backed nuclear startup Oklo. It's a lot easier to add new technology to newer builds, to the sort of newer generation of small modular reactors and companies that are hoping to bring nuclear power online rather than updating existing nuclear power plants, some of which may be aging out of commission. Argonne, for instance, is looking to these companies like TerraPower and Oklo, which are backed by big tech and big tech personalities, but there's also a hope that the existing nuclear plant providers

will be wanting to upgrade their plants as their lifetimes become extended because of the greater need for nuclear power. And you can hear Bell's full interview on today's episode of Tech News Briefing. The cooling U.S. economy is making it tougher for young would-be workers to land an entry-level job. That generation is taking a bigger interest in joining the family business as a result. It's a welcomed prospect for many older business owners anxious to make succession plans. According to an analysis by payroll provider Gusto, the share of small businesses that employ a young adult child of an owner has doubled since 2018 and is up 13% year-over-year as of January. On our Your Money Briefing podcast, economy

reporter Rachel Wolf said young people have changed their thinking about joining mom or dad at work. There's definitely a mindset shift from a decade ago. The analysts I spoke to told me what you saw before was that people really tended to stigmatize returning to their family business. There was this sense And you can hear more in tomorrow's Your Money Briefing podcast. Before we go, heads up, we made a correction to this morning's episode. We'd said an estimated $1 trillion of goods transits through the Gulf of Aden daily when it's actually yearly. And that's what's news for this Monday afternoon. Today's show was produced by Anthony Bansi with supervising producer Michael Cosmides.

I'm Pierre Bienemé for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.