US Additional Tariffs Send Stock Markets Lower
Global stock markets traded lower today, after US President Donald Trump's new trade decision. Trump ordered trade representative Robert Lighthizer to consider additional tariffs on $100 billion of Chinese imports, escalating the trade conflicts between the world’s two largest economies. If these tariffs are imposed, they will feel let down and that will show at the polls, potentially causing critical harm to Republicans in the Senate and the House. The US futures pointed to a lower opening bell on Friday, as worry over a potential trade war between the US and China kept markets on edge.
Markets are expecting NFP to show 189k growth in March, down from February’s 313k. Unemployment rate is expected to drop further to 4.0%. Wage growth remains the key for Fed’s tightening path. Average hourly earnings are expected to grow 0.3% mom in March.
Wage growth means higher inflation and more interest rate hikes this year. The Federal Reserve has been raising interest rates in anticipation of higher inflation but that hasn’t really materialized. Signs of inflationary pressures building could encourage them to push for a fourth hike this year, which they weren’t far from forecasting last month.