Trump Sparks Global Trade War Fears: 05 February 2025
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Market Mood
Investors and policymakers are closely watching Friday’s US jobs report as it could influence the ongoing interest rate debate. Despite pressure from President Trump for lower rates, the Fed has maintained its benchmark rate, citing strong economic growth, a resilient labor market, and elevated inflation. Speculation is growing that tariffs and immigration restrictions could drive inflation higher, while a pro-business stance has boosted hiring. If January’s payroll data shows continued momentum, expectations for Fed rate cuts in 2025 may weaken. Meanwhile, the BoE is expected to cut rates from 4.75% to support the UK’s sluggish economy, with traders anticipating further reductions despite inflationary and fiscal concerns.