Tariffs again remain a concern, following the introduction of a global and blanket 25% tariff, imposed on Steel and Aluminium. This has dominated market conversations and was a particular focus on the questions, put to the Federal Reserve Chairman Powell. Powell emphasised the Fed’s uncertainty over tariffs is part of the reason they have decided not to cut rates. He also noted that inflation was falling, and the economy was strong. Trump has called for lower interest rates, not only in the US, but globally. The Fed is setting itself up for a big confrontation with the Trump administration and all hell could break loose, if the US Government initiates the first ever audit of a ‘bankrupt’ Fed. The US Dollar continued to ease, with the EUR rising to 1.0340, while the GBP regained 1.2400.The global imposition of tariffs on steel and aluminium, could be a serious problem for Australia, but the President did say the US had a trade surplus with Australia and they may receive an exemption. The AUD consolidated and is currently pushing towards 0.6300, while the NZD drifted below 0.5650. Attention will focus on the inflation reports from the US and Europe, while trade wars escalate.
