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GBP/USD News
Is a soft landing turning into a hard landing? Trump's policy shift has caused panic on Wall Street.
Recent remarks and policies from Trump and his senior advisors indicate a "disregard" for risks such as trade uncertainty, stock market declines, and even short-term inflation increases. JPMorgan believes that the risk of economic recession has risen from 30% to 40%. An Analyst stated that the market has returned to a state of "recession watch".
Concerns over the USA economy have triggered market turmoil, with Forex Options Trading for the euro and yen being highly sought after by macro Funds.
In response to concerns about the USA economy causing market turmoil, macro hedge funds are increasingly seeking to exclude the US dollar from Forex Options Trading. On Monday, trades involving the euro and the safe-haven currency yen were in high demand. On that day, US Technology stocks recorded their largest decline since 2022, while these two currencies easily became the largest in terms of trading volume at the Depository Trust & Clearing Corporation (DTCC), accounting for more than half of the total. Morgan Stanley strategists Zoe Strauss, David Adams, and others wrote in a report on Monday that options data shows euro long positions are at their highest level since 2020.
Markets Rocked as Wall Street Frets Over Trump's Economic Impact
Dollar Could Fall Further as Markets Price Out U.S Exceptionalism -- Market Talk
The Federal Reserve's spokesperson: The market is concerned that Trump is tacitly allowing economic damage, and negative feedback is unlikely to change the chaotic nature.
① Various signs indicate that Trump and his economic team have openly acknowledged that their policies will harm the USA economy, while also being willing to accept this situation; ② There are historical precedents in the USA for successfully reducing fiscal deficits, but the current situation where Trump simultaneously initiates multiple economic experiments is indeed rare; ③ Further concerns are that if Trump's policies trigger extreme negative feedback in the market, he may implement more aggressive strategies.
Former US Treasury Secretary Summers: The probability of a recession in the USA is very close to "50/50," something I couldn't believe a few months ago.
Summers posted on social platform X stating that the likelihood of the USA economy entering a recession is now 'close to 50/50'. This assessment is significantly more pessimistic than his expectations a few months ago. He attributed the rise in this risk to a core issue of 'completely counterproductive economic policies', along with the dual negative impact of tariff policies and their uncertainty on the economy.
U.K. Defense Spending Likely to Rise Further, Driving Up Inflation -- Market Talk
Inflation expectations are stable, but economic concerns are growing: A New York Fed survey reveals the contradictory mindset of USA consumers.
The consumer expectations survey released by the New York Federal Reserve Bank on Monday (March 10) shows that while Americans' expectations for future inflation remain stable, concerns about the economic outlook have significantly intensified in February. One-year inflation expectations slightly increased to 3.1%, while three-year and five-year inflation expectations remained unchanged at 3%. However, concerns about rising unemployment rates, increasing difficulty in accessing Crediting, and worsening financial conditions are deepening, reflecting a pessimistic sentiment about the economic outlook. This contradictory mindset highlights the complexity of the current economic environment in the USA. Inflation expectations remain stable according to the New York Fed's survey, in February, the expectations of American consumers for inflation.
Did Trump "bring down" the USA economy? Former Treasury Secretary Summers: The probability of a recession this year has reached fifty-fifty!
Former USA Treasury Secretary Summers stated that the probability of the USA economy falling into recession has reached nearly 50%, mainly due to counterproductive economic policies. After President Trump officially took office and initiated the 'tariff war', concerns about inflation rising again and economic growth slowing down have intensified, further exacerbating the sell-off in the US stock market.
Federal Reserve Board member Kugler: Inflation may rise, and the Federal Reserve should keep interest rates unchanged.
Kugler also pointed out that recent inflation expectations have accelerated, which will affect companies' pricing strategies and workers' wage negotiations, further pushing up inflation.
BRC: UK Retail Sales Up 1.1% in February
The expectation of a Federal Reserve interest rate cut is rising, and the dollar may continue to decline.
The market generally expects that the Federal Reserve will not cut interest rates at next week's policy meeting. However, with rising concerns about trade and Trump's recent comments about an economic 'transition period,' market bets on a rate cut in June have significantly increased. U.S. Treasury yields dropped sharply on Monday, reflecting growing fears of an economic recession. Futures market data show that among contracts linked to the Federal Reserve's policy rate for June, July, and October, an increasing number of investors are betting that the Fed will cut rates by 25 basis points consecutively. This market expectation partially stems from Fed Chairman Powell's dovish remarks last Friday. Although Powell still emphasized labor.
U.K. Retail Sales Grew Slightly in February Supported by Growth in Food
Weak non-farm payrolls caused the dollar to decline. Economic data will guide market direction.
In summary, last week, the dollar fell sharply by 3.4% on a weekly basis, returning to the levels seen in early November 2024. The non-farm payroll report released on Friday showed data that was below expectations, causing the dollar to experience significant fluctuations before closing at a relatively low point.
Market sell-offs and economic uncertainty have led Bitcoin to face further declines: waiting for key signals from the Federal Reserve.
Due to the increase in tariffs by the USA and concerns about economic recession causing a significant change in investor sentiment, the landscape of Cryptos shows great vulnerability to macroeconomic factors. Bitcoin recently broke below the $80,000 level both digitally and psychologically, indicating a heightened level of caution among traders. Bitcoin fell to around $76,500 at its lowest point, followed by a slight rebound. The performance of Ethereum has not been much better, as its value has dropped over 11%, with the current trading price around $1,850, marking its lowest level since October 2023.
"Manufacturing recession"? Trump and Bessent have almost "given the hint"; the key next step is: which will happen first, a sharp decline in the U.S. stock market, or concessions from Congress and the Federal Reserve?
Nomura's analysis indicates that the USA is experiencing an artificially created recession, with the issue being the time lag between the 'painful' first phase and the market-favorable second phase (massive deregulation, tax cuts, and Federal Reserve interest rate cuts). To regain market confidence in the future, the Trump administration needs to find a way to shorten the timeline and bring forward the 'benefits' of the second phase.
Lowering the GDP forecast for the USA and raising the inflation forecast, even the "optimists" at Goldman Sachs are now seeing "stagflation."
Due to concerns over tariff policies, Goldman Sachs has lowered its GDP growth forecast for the USA in 2025 from 2.4% to 1.7%, and raised the 2025 core PCE price index to 3%. It is expected that the average tariff rate in the USA will rise by 10 percentage points this year, five times the level during Trump's first term in office. Platform data shows that the market currently estimates a 40% chance of an official announcement of economic recession in the USA by the end of this year.
U.S. government officials warn that the economy may slow down in the short term while Trump emphasizes that this is a transition, not a recession.
Recently, President Trump and his senior officials have repeatedly signaled to the public that the USA economy may experience a slowdown in the short term, but they believe this is merely a "transitional period" of economic adjustment, which will ultimately lead to stronger growth.
National Bank on the Outlook For Both the U.S. and Canadian Dollars
Tariffs Will Likely Dent GDP, Accelerate Inflation, Goldman Sachs Says