Hopes that Trump’s blistering tariffs can be pared back have helped temper some of the disquiet on markets after a rout at the start of the month, fuelled by talk of a global recession and an upending of historic trading norms.
Some have said there were rumblings that the target of his most painful measures could be open to dialogue, with Bloomberg reporting China wants to see some measures beforehand, including reining in some Cabinet members’ anti-Beijing comments.
Shares in Tokyo rose more than 1 per cent with Hong Kong, Singapore and Mumbai, while Shanghai, Sydney, Seoul, Wellington, Bangkok and Jakarta were also up. Taipei edged down along with London, Paris and Frankfurt.
However, uncertainty continues to prevail on trading floors after a selloff on Wall Street was sparked by Powell’s warning over the impact of the tariffs. Gold hit a fresh record above US$3,357 on Thursday.
Powell said that while the Fed’s employment and inflation goals were largely in balance at this point, policymakers could find themselves in the “challenging scenario” depending on how things evolve.
“Tariffs are highly likely to generate at least a temporary rise in inflation,” he told the Economic Club of Chicago, adding that the inflationary effects “could also be more persistent”.
He added: “You’ll probably see continued volatility.”
