Trump didn’t stop there. In a follow-up post, he proposed a flat 50% tariff on the European Union, set to begin June 1. Later in the day, he reaffirmed his position, stating, “I’m not looking for a deal with the EU. It’s set at 50%.” The message is clear—Trump remains steadfast on tariffs, whether targeting foreign nations or U.S.-based companies.
Markets opened lower on the news. Although equities recovered somewhat intraday, they faded back toward the middle of the day’s range by the close.
Dow Jones: -256.02 pts (-0.61%) at 41,603.07
Nasdaq Composite: -188.53 pts (-1.00%) at 18,737.21
Dow: -2.47%
Nasdaq: -2.47%
2 year yield 3.993%, -0.6 basis points5-year yield 4.077%, -2.5 basis points10-year yield 4.509%, -4.4 basis points30-year yield 5.031%, -3.3 basis points.
For the trading week, the yield curve is steep and with a
2-year yield unchanged10 year yield is up 6.4 basis pointsThat policymakers speaking today gave a cautionary tone:
Chicago Fed Pres. Austan Goolsbee, speaking on CNBC, emphasized that businesses are seeking consistency in policy amidst the uncertainty created by rapidly changing tariffs—particularly pointing to the proposed 50% EU tariff as a disruptive and alarming development for supply chains. He noted growing anxiety among firms about inflationary pressures stemming from ongoing tariff announcements and warned that such moves could have stagflationary consequences—the worst-case scenario for a central bank. Goolsbee stressed the importance of waiting for clearer data before acting, acknowledging that the effects of current policies may already be in motion but not yet visible in economic reports. While he still believes the U.S. economy is fundamentally strong, he indicated that his previous forecast for rate cuts by year-end may now be delayed by up to 16 months due to heightened uncertainty.St. Louis Fed Pres.Musalem warned that the Fed is closely monitoring signs that short-term inflation expectations could seep into long-term outlooks, a dynamic they are keen to avoid. He noted that businesses are already expecting higher input and output prices and are struggling to manage growing uncertainty. While GDP is currently close to its potential, inflation remains above target. Musalem also emphasized that the current environment is markedly different from the pandemic era, adding that the probability of a near-term Fed rate cut is low—estimated at just one in five.Finally, Kansas City Federal Reserve Pres. Jeffrey Schmid emphasized that current uncertainty is largely being driven by ongoing tariff discussions. He stated that the Fed will place greater weight on hard data rather than forecasts when making interest rate decisions, cautioning against overreliance on soft data. Schmid also highlighted the need for the Fed to carefully consider its future use of the balance sheet. He acknowledged that markets have already priced in 83 basis points of rate cuts over the coming year.The US dollar would lower versus all the major currency pairs with the biggest mover being against the NZD /1.44%) and the AUDUSD (-1.31%).
For the trading week, the dollar was weaker vs all the major currencies as well::
EUR: -1.81%JPY, -2.13%GBP, -1.99%CHF -1.93%CAD -1.69%AUD, -1.47%NZD, -1.82%Looking at other markets:
Crude oil fell modestly this week by -0.29%Gold rose by 4.82% with its largest weekly gain since April 7 Bitcoin rose from $106,520 to $108,234 This article was written by Greg Michalowski at www.forexlive.com. Read More Details
Finally We wish PressBee provided you with enough information of ( Forexlive Americas FX news wrap 23 May: Pres. Trump is not partial to who he tariffs )
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