The US financial markets are currently under the influence of an intense trade conflict, particularly with China, leading to historically strong sell-offs in the S&P 500. Due to new tariffs of 34 percent on certain US products, market uncertainty has intensified, and the Federal Reserve is facing the challenge of reconsidering its monetary policy strategy. Some economists do not expect any short-term interest rate cuts, while others anticipate easing by fall, should economic slowdowns occur. Many investors are temporarily shifting to safe assets like US Treasury bonds and reducing risk exposure until there is clarity on the trade conflict. In the Eurozone, growth prospects and the European Central Bank’s interest rate policy are causing concern. With multiple interest rate cuts since June 2024, the ECB is attempting to control inflation and boost growth. Against the backdrop of falling energy prices and a stronger euro, the ECB remains optimistic about reducing inflationary pressure, which could possibly lead to further rate cuts. Geopolitical tensions, monetary policy uncertainties, and moderate growth present complex challenges for investors, while in Europe it remains to be seen whether monetary policy measures will support growth or if external shocks will require adjustments.
03.05.2025