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Peter Schiff, Chief Economist and Global Strategist at Europac, warned:
“Long before the harmful effects of tariffs have a chance to negatively impact the U.S. economy, the anticipation of those effects in the currency and bond market could spark a financial crisis worse than 2008. It’s the risks that no one is worried about that do the most damage.”
US Producer Prices and Michigan Consumer Survey Send Mixed Signals
US producer prices increased 2.7% year-on-year in March, following February’s 3.2% rise. March’s print suggested a softer demand environment, potentially easing inflationary pressures and supporting a dovish Fed stance.
However, consumer sentiment data delivered a mixed message. The Michigan Consumer Sentiment Index dropped from 57.0 in March to 50.8 in April, while the Inflation Expectations Index jumped from 5% in March to 6.7% in April. Waning sentiment and higher inflation expectations are troubling signs for inflation dynamics.
Tariff U-Turn Boosts Risk Sentiment
While US economic data and market trends typically influence the Asian markets, tariff developments continue taking center stage.
On April 12, CN Wire reported that selected electronics, including computers and laptops, routers, and smartphones, would be exempt from reciprocal tariffs. The Kobeissi Letter reacted to the news, stating:
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