5th March 2018

Trump renews fears of global trade war

This week we have been rocked by two irrepressible forces of nature – the “Beast from the East” weather front and Donald Trump’s Twitter feed.

While freezing weather has caused chaos across the UK, the suggestion that the US might impose heavy tariffs on steel and aluminium imports has the potential to do the same to global trade. While there has been a lot of noise surrounding the Trump presidency, he has largely followed the Republican playbook. If the trade war materialises however, this could cause a major shock to the global economy.

Elsewhere markets were spooked by Jerome Powell, the new Fed Chair, who gave his first speech since taking over. While he’s widely seen as a safe pair of hands, hints that he might hike rates faster than his predecessor caused some turmoil. We have often been dismissive of the fevered interest rate speculation that often gripped the press in the past but this time the attention is justified. The reversal of ultra-loose policy will be the deciding factor in market behaviour for the next decade.


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