Hello MarketShalians, Welcome to today’s World Economy Actions and Its Impact financial blog at MarketShala. Let us take a look at what major buzz related to the economic actions are taking place in the country and the world and what impact they are going to have.
Table of Contents
South Korea Set for Crucial Trade Talks with Trump Administration This Thursday
South Korea is set to commence trade negotiations with the Trump administration this Thursday. Ahead of the talks, South Korea’s acting President Han Duck-soo told the FT that Seoul “will not retaliate” and is ready to negotiate non-tariff barriers, citing the country’s historic debts to the US.
Japanese Investors Offload $20 Billion in Overseas Bonds as Trump’s Tariff Moves Unsettle Markets
Japanese investors sold more than $20 billion in international bonds earlier this month as Donald Trump’s tariffs roiled markets, a sign of how the turmoil on Wall Street reverberated around the world. Private institutions including banks and pension funds sold $17.5 billion of long-term foreign bonds in the week ended April 4 and another $3.6 billion over the next seven days, according to preliminary data from Japan’s Finance Ministry. Japan holds $1.1 trillion in U.S. Treasuries in the public and private sectors – the largest international reserves in the world – so its transactions are closely tracked and considered a proxy for purchases or sales of U.S. government debt.
JPMorgan Warns 90% Chance of US Recession by 2025 Without Policy Shift
JPMorgan analysts said the average trade deal takes 18 months to negotiate and 45 months to implement. “We maintain our stance that, unless there is a shift in current policies, there is a 90% likelihood of a U.S. recession occurring by 2025” they said in a note. China on Monday warned countries against striking trade deals with the U.S. at the expense of China. Traders will be eyeing earnings reports all week, with 27% of the S&P 500 due ahead of results. The dollar’s weakness and increased demand for safe-haven assets pushed gold to a record high of $3,500.05, before it pulled back slightly to around $3,455.43, still showing a gain for the day.
Russia Lowers Brent Oil Price Outlook as US-Iran Nuclear Talks Gain Momentum
Russia’s Economy Ministry has cut its forecast for the average price of Brent crude in 2025 by about 17% from what it had predicted for this year’s price in September calculations. It now projects Brent crude at $68 per barrel, a decrease from the $81.7 per barrel forecasted in September. Progress in talks between the United States and Iran, which agreed on Saturday to lay out the framework for a potential nuclear deal, could result in Trump backing down from efforts to block the Middle Eastern country’s oil exports.
Investor Panic Grows Over Trump’s Move to Fire Fed Chair, Dollar Weakens
White House economic adviser Kevin Hassett said on Friday that Trump and his team are studying whether they could fire Powell, while Trump said on Monday that the economy could slow if rates were not immediately reduced. Investors are concerned that if President Donald Trump attempts to remove Federal Reserve Chairman Jerome Powell, it could significantly affect asset prices and erode confidence in the central bank’s ability to combat inflation and maintain its independence. That could hurt an already weak dollar, pressure equities and push up bond yields.
Powell’s Job at Risk? Trump Considers Replacement Amid Investor Anxiety
Investors said they are starting to take seriously the prospect of an attempt to remove Powell, even though there are hurdles to doing so. Powell has consistently stated that he believes his removal is prohibited by law. He also recently mentioned that ongoing court cases regarding Trump’s attempts to remove other independent federal agency heads would not apply to the Federal Reserve. The Wall Street Journal reported last week that Trump has considered replacing Powell with Kevin Warsh, who served as a Fed governor from 2006 to 2011. Warsh has advised against that, advocating that Trump should let Powell stay on until his term as Fed chair ends in May 2026, the paper said.
US-India Strategic Talks Overshadowed by Trump’s Fed Criticism: Dollar Sinks, Safe-Haven Gold Surges
- The US Vice President and the Prime Minister meet in Delhi, with a statement detailing discussions on trade, energy, defense, and strategic technologies.
- US stocks and the dollar fell as Trump again attacked Fed Chairman Powell. The currency sell-off accelerated after the president criticized the central bank chief for not cutting rates.
- Trump’s attack on Powell stirred the market, gold reached $3,500 for the first time. Demand for haven assets increased due to investors’ uneasiness over criticism of the US Fed.
- Japanese investors sold $20 billion of foreign debt as Trump’s tariffs roiled markets.
Conclusion and disclaimer
The content on MarkShala.com is intended for educational and informational purposes only. We specialize in writing blogs on financial planning, investment strategies, economic trends, and related topics. While we strive to provide accurate and reliable information, the content should not be taken as professional financial, investment, or legal advice.
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