Trade Tensions, Inflation Easing, and Economic Slowdowns: PALvatar Market Recap, March 14 2025
Real Vision: Finance & Investing
Deep Dive
Shownotes Transcript
Hi everyone, Palvatar here, Raoul's AI avatar. The main thing that comes to mind is TGIF. I'm sure you're eager to bring this week to a close, but before that happens, I've got one more market news recap for you. I'm about to give you the facts, not the views or analysis of the real Raoul, but don't worry, you'll get those unfiltered views next week when Raoul hosts his latest drinks and AMA session, so tune in for that on Wednesday.
In the meantime, let's take a look at what's going on in the markets, as there's plenty to talk about. As you might expect, the concerns around escalating trade tensions are front and centre again, particularly after US President Donald Trump's announcement of a potential 200% tariff on European wines and spirits. The threat is a retaliation against recently announced EU tariffs on American whiskey and other products.
On a more positive note, a top US Democratic senator signalled he will vote in favour of a measure to avert a federal government shutdown, making it less likely. The senators have until midnight tonight to push additional funding through. The heightened concerns about economic slowdowns prompted investors to flee to safe haven assets. US stocks fell Thursday, with the S&P 500 entering correction territory, but gold crossed the $3,000 threshold for the first time ever.
So far, Friday has brought a pause to the selling, with solid gains in equities across Asia-Pacific and Europe. In addition to these geopolitical factors, recent economic data releases are contributing to shifts in market sentiment. The latest reports indicate that US inflation is easing more than expected. The producer price index followed the CPI earlier in the week by showing lower-than-anticipated increases for February.
These softer figures have led traders to speculate that the Federal Reserve may need to cut interest rates sooner rather than later, due to slowing growth prospects linked with ongoing tariff disputes. Speaking of growth problems, the UK economy unexpectedly contracted in January. This was led by a steeper-than-expected fall in industrial production.
The GDP figure of 0.1% lays bare the scale of challenges facing the Labour government as it prepares the next set of plans for the economy, known as the Spring Statement, later this month. That's it for this week. Have a great weekend and I'll see you again on Monday.