{"id":12391,"date":"2025-04-12T10:53:37","date_gmt":"2025-04-12T10:53:37","guid":{"rendered":"https:\/\/alchemymarkets.wpengine.com\/?post_type=market_insights&p=9954"},"modified":"2025-05-16T07:05:55","modified_gmt":"2025-05-16T07:05:55","slug":"tariff-turmoil-market-mayhem-7-wild-days-that-left-everything-the-same","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/sv\/education\/market-insights\/weekly-outlook\/tariff-turmoil-market-mayhem-7-wild-days-that-left-everything-the-same\/","title":{"rendered":"Tariff Turmoil & Market Mayhem: 7 Wild Days That Left Everything the Same"},"content":{"rendered":"\n

This past week in financial markets was nothing short of a rollercoaster ride. US 10-year Treasury yields soared by over 40 basis points \u2013 a move we haven\u2019t seen since the early 2000s. The dollar weakened nearly 4% against the euro, and the S&P 500 surged almost 4%. On paper, it was one of the wildest weeks in recent memory. Yet, for all the noise and movement, the broader economic outlook remains almost exactly where it was seven days ago.<\/p>\n\n\n\n

The standout drama was the 90-day tariff reprieve granted to several key US trading partners. While this created an initial sense of relief, it was quickly balanced out by a staggering escalation in tariffs on China. The effective average US tariff rate still stands at 28% \u2013 unchanged from the level before this week\u2019s developments. For context, that\u2019s the highest it\u2019s been since the early 20th century.<\/p>\n\n\n\n

Tariff Tensions: More Smoke Than Fire?<\/strong><\/p>\n\n\n\n

Despite the sharp change in direction, the actual impact of this week\u2019s trade policy shakeup may be less meaningful than it first appeared. While some countries, especially in Europe and Southeast Asia, benefitted from a reduction to a 10% tariff rate, China saw its tariffs spike to 145%.<\/p>\n\n\n\n

In practice, this won\u2019t shift much for importers. Most businesses that could avoid Chinese goods have already done so. Those that can’t will have to absorb the cost or pass it along to consumers, raising inflationary pressure.<\/p>\n\n\n\n

Inflation Pressure Is Building<\/strong><\/p>\n\n\n\n

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US inflation is expected to rise despite the latest softer-than-expected consumer price data. The lag effect of tariffs means the impact on inflation could be felt within months. With consumers likely to front-load spending to avoid price hikes, a short-term retail boost is likely, but a subsequent slowdown remains a strong possibility.<\/p>\n\n\n\n

Expect monetary policy to respond. The market is currently pricing in three to four rate cuts in the second half of the year \u2013 a shift from earlier expectations. The Federal Reserve\u2019s focus will stay on inflation for now, but attention could turn toward growth risks by summer.<\/p>\n\n\n\n

Europe Eyes Rate Cuts Amid US Uncertainty<\/strong><\/p>\n\n\n\n

The European Central Bank is still on course for a rate cut next week. Despite receiving a better-than-expected deal on US tariffs, Europe\u2019s economic trajectory remains closely tied to the US. If the American economy starts to falter, export-heavy EU nations will feel the strain.<\/p>\n\n\n\n

Though there\u2019s long-term optimism about major fiscal spending across the eurozone, this won\u2019t materialise until at least 2026. In the meantime, monetary policy will need to do the heavy lifting.<\/p>\n\n\n\n

Markets Looking for Stability<\/strong><\/p>\n\n\n\n

Financial markets remain highly sensitive to signs of policy shifts. This week\u2019s bounce in risk assets following the tariff reprieve highlights how jittery sentiment is. However, that initial rally faded quickly \u2013 a signal that investors remain wary of the uncertainty and abrupt policy changes still hanging over global markets.<\/p>\n\n\n\n

Bond yields could push even higher in the near term, potentially approaching 4.75% on the US 10-year Treasury. In currency markets, the dollar\u2019s decline may not yet have found a floor.<\/p>\n\n\n\n

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What to Watch for Next Week (April 14-20)<\/strong><\/p>\n\n\n\n

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United States<\/strong><\/p>\n\n\n\n