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Bloomberg Quint
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Charting The Global Economy: Turbulence Accompanies Tariff Pause
- After President Trump's decision to pause some tariffs, global financial markets continued to be turbulent, with investors seeking safe havens and central banks lowering interest rates.
- Economic data in the US showed decreased inflationary pressures before broad tariffs were imposed on trading partners, causing stress in the economy and raising recession concerns.
- Investors moved away from US Treasury securities and the dollar depreciated, raising questions about America's safe haven status, while gold prices surged.
- Central banks in India and New Zealand cut interest rates to mitigate tariff impacts, while other countries also adjusted their rates in response.
- Global economy forecasts now face challenges from colliding shocks, with uncertainty surrounding Trump's tariff decisions impacting trading partners worldwide.
- Gold prices soared to record highs due to increased buying activity, influenced by major players and central banks strengthening their positions in the market.
- US inflation cooled in March, providing temporary relief for consumers before the tariff effects manifest, while consumer sentiment dropped, and inflation expectations rose.
- Amid the trade war, Treasuries experienced a decline as investors retreated from US assets, leading to notable weekly yield hikes and potential impact on borrowing costs.
- Various countries implemented interest rate adjustments, with some lowering rates to counter tariff effects, while others maintained their rates or raised them.
- China retaliated against US tariffs by raising duties on American goods, escalating tensions, while other Asian nations looked to LNG purchases from the US to mitigate trade imbalances and tariff pressures.
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