Weak data and Trump's tariffs increase hopes for a rate cut. An analysis of key signals.
📉 Markets tremble, Fed under pressure: bad news — good news?
On Tuesday, nerves stirred in the markets. Weak macro data, alarming signals from companies, and Trump's tariffs looming over global trade — all this is turning into fuel for new bets: markets are seriously counting on a rapid rate cut from the Fed.
But behind this optimism — a growing fear. Here’s what happened 👇
📦 Trade deficit: the US is panic-buying imports again
March goods deficit in the US — a record $162 billion. This is much higher than expectations.
📌 Why? Businesses and consumers are rushing to stock up on goods before the new tariffs announced by Trump on April 2 take effect. The déjà vu effect from 2018: a sharp spike in imports — before the hit to prices.
😟 Consumer in stress
Consumer confidence has fallen for the fifth consecutive month, and April was the worst since the start of COVID-19.
📉 Americans' expectations are at a 13-year low.
The lower the confidence — the less spending. This is not just statistics, but a signal: the economy is losing its anchor in the consumer.
💼 The labor market is cooling
There are only 7.19 million open jobs. This is below the forecast and less than past values.
📌 Employers are no longer so confident about tomorrow — and this is a dangerous turn for an economy already balancing between high rates and inflation.
📉 Betting on the rate
Stock markets rose — despite the bad news. Why?
👉 Because bad data = higher chance of a Fed rate cut.
If the market previously expected -50 basis points this year, now it’s -100 basis points.
Markets are trading on future salvation, not current realities.
🧾 Corporations: from reports to refusals
📈 Honeywell and Pfizer — up 5% and 4% on strong reports
💻 IT sector — in the green
📉 But UPS withdrew its forecast for the year → -2%
⚠️ GM canceled buyback and withdrew forecast due to tariff risks → -4%
📌 Conclusion: even large companies fear trade uncertainty.
🌐 Trump and trade: tough times again
Treasury Secretary Bessent strongly criticized Beijing:
"Chinese tariffs are unsustainable for China itself."
Meanwhile, Washington is close to a deal with India.
💬 A new round of trade negotiations is starting — and markets are reacting.
⏳ What’s ahead?
The next data could radically change investor sentiment:
📅 Wednesday
US GDP for Q1
PCE Index — a key inflation indicator for the Fed
📅 Friday
April labor market report
Any weakness in these numbers is another argument for a quick rate cut. That means another wave of movements in the stock, crypto, and bond markets.
📊 While markets look up — the economy looks down.
Stay with us to stay one step ahead.