Following Donald Trump’s announcement of tariffs on major US trading partners, financial markets that had bet on avoiding trade conflicts are recalibrating the risk of a severe global downturn, renewed inflation, and a delay to Federal Reserve rate cuts.<\/p>\n
Markets that had concluded Trump was primarily bluffing and bluste were shocked by the US president’s weekend orders for extra tariffs of 25% on imports from Mexico and the majority of goods from Canada, as well as 10% on goods from China.<\/p>\n
Following Trump’s announcement on Monday that he would halt fresh tariffs on Mexico for a month and hold additional talks, the initial risk-off response subsided. The United States also delayed imposing tariffs on Canadian products later in the day.<\/p>\n
Part of the news may have been priced in because Trump, the self-declared “tariff man,” has been hinting at his plans for months. Additionally, he is a dealmaker who has a track record of shifting course when he receives what he desires from trading partners. Since nobody can predict what will happen next, volatility should continue to be high.<\/p>\n
The tariff gun is loaded but not fired, so we’re going to postpone this for a month,” stated Art Hogan, chief market strategist at Boston-based B. Riley Wealth. Because there is a genuine chance for some sloppy markets if he simply pushed this along.<\/p>\n
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