U.S. stocks have tumbled ever since President Donald Trump announced reciprocal tariffs on U.S. trading partners, raising fears of a global trade war. China has already retaliated with its own 34% tariff and other countries are contemplating their responses.
The tariffs will have an inflationary impact, and Federal Reserve Chair Jerome Powell has on more than one occasion said that the U.S. central bank is in no hurry to cut rates and instead will watch the impact of Trump’s trade and immigration policies. Multiple economists have raised the odds of a U.S. recession this year. The fears are not unfounded as the U.S. growth engine – that’s predominantly led by an unending consumption appetite – is losing steam, as retail companies warned in their recent earnings calls.
