What did Donald Trump do today?

He backed down still yet again on tariff-related threats.

Yesterday was another disastrous day for American markets, spurred by a Trump rant about Federal Reserve chair Jay Powell, whom he called a "major loser." (As with many government officials Trump now thinks are worthless, Powell was appointed by Trump himself, during his first term.) In particular, Trump is upset because he wants the Fed to cut interest rates quickly and sharply, while Powell—and the overwhelming consensus of economists and investors—favor a much slower and cautious approach.

Trump may believe that lowering interest rates and loosening the money supply will cushion the blow that the U.S. economy is likely to receive from the effect of Trump's own tariffs. But like medicine wasted on a patient that hasn't fallen ill yet, that would almost certainly make things worse in the long run, since interest rates can only be lowered so many times.

Alternatively, he may simply think that lower interest rates are always good, because they usually are for heavily indebted and overleveraged real-estate brokers—particularly the ones who call themselves "the king of debt." Trump did indeed wring some money out of debt renegotiation, but only because he could and at times did declare bankruptcy, which is not an option available to the United States.

In response to Trump's threats to fire him, Powell has simply said that Trump cannot fire him, and that he would not leave if Trump tried.

Powell is correct. By laws that were written precisely with the central bank's independence from political pressure in mind, presidents can remove Fed chairs only for cause, which the Supreme Court has defined as malfeasance or criminal conduct. Of course, Trump could try—but it would all but guarantee another market crash in the process.

Retreating today after what the extremely conservative Wall Street Journal editorial page called the "Fire Jerome Powell Market Rout," Trump repeatedly said he wouldn't even try to fire Powell.

Markets were up today on the news—but also because of another Trump administration retreat on the tariff front, this time from Treasury Secretary Scott Bessent. He acknowledged to a group of extremely wealthy investors at a private meeting that Trump's current trade stance was "unsustainable," particularly with respect to China, and that "de-escalation" was the next likely step. Trump himself confirmed this later, though insisted that tariffs on Chinese goods would "not drop to zero." (They didn't start at zero.)

In other words, Bessent effectively leaked Trump's intention to fold his hand after some degree of performative "negotiation." That would be extremely good news for the U.S. economy, though—as the WSJ noted—not as good as simply giving up now, without trying to save face first.

Why does this matter?

• The stability of the United States economy is more important than Donald Trump's ego.

• Threats are never less credible than when they're coming from a bully who always gives up at the first sign of someone fighting back.