What to know:
- President Trump has upped the ante with tariff threats, warning 14 countries of higher tariffs starting August 1. But, folks, it’s like he’s playing a game of chicken with the world, and the markets are betting he’ll swerve first.
- Interest rate markets are skeptical, expecting Trump to eventually reach a compromise. After all, the man’s a master of the art of the deal, right? 🤷♂️
- Despite the tariff talk, U.S. equity markets and bitcoin have shown little reaction, stabilizing after minor fluctuations. It’s like they’re saying, “We’ve heard this song before, and it’s getting old.”
U.S. President Donald Trump has turned up the heat on his tariff rhetoric this week, but the financial markets are about as impressed as a cat with a bowl of water. They’re likely expecting the President to back down and eventually reach a compromise with trading partners.
Earlier this week, the Trump administration sent out letters to 14 countries, warning of higher tariffs on their export of goods to the U.S. starting on Aug. 1. The original 90-day pause on tariffs was set to expire on July 9. On Tuesday, Trump stated on Truth Social that the Aug. 1 deadline won’t be extended and new tariffs will go into effect on that day. But, let’s be real, has anyone ever seen Trump stick to a deadline? 🤔
However, markets seem to believe the adage that Trump always chickens out (TACO), as evident from the steady interest rate expectations in the U.S. It’s like they’re saying, “We’ve seen this movie before, and it ends with a handshake and a smile.”
As of writing, the CME’s FedWatch tool showed expectations for two 25 basis point rate cuts this year, with the first to come through in September. Markets priced out the July rate cut following Friday’s hotter-than-expected jobs report, and the hawkish repricing has held steady in the wake of Trump’s tariff threat. At the same time, there seems to be little-to-no fear about a tariff-led spike in inflation, else traders might have priced out the September rate cut as well.
That’s in stark contrast to March when Trump’s tariff threats saw traders price rapid fire rate cuts, starting from June this year. Perhaps, traders expect the deadline to be suspended indefinitely, leading to negotiations and eventual trade deals, as ForexLive noted. It’s like they’re waiting for the other shoe to drop, but they’re not holding their breath.
The MOVE index, which measures the options-based 30-day implied volatility in the U.S. Treasury notes, continues to trend lower as opposed to early this year when trade war fears and fiscal concerns saw the index rise from 86.00 to 139.00 in two months to early April. It’s like the market is saying, “We’ve got this.”
The U.S. equity markets and bitcoin aren’t paying heed to Trump’s threat either. On Monday, the S&P 500 dropped 0.8% to 6,210 points and quickly stabilized Tuesday at 6,225. Bitcoin, the leading cryptocurrency by market value, continues to trade lackluster above $105,000, CoinDesk data show. Both markets peaked in February and trended lower as the first round of tariffs war unfolded in March and early April. It’s like they’re saying, “We’ve got better things to do than worry about this.”
Lastly, the dollar index, which tracks the greenback’s value against major currencies, rose 0.55% to 97.60 Monday and has since stabilized around these levels, topping the bearish trendline from the Feb. 3 highs. It’s like the dollar is saying, “I’ve seen worse.”
Read More
- DOT PREDICTION. DOT cryptocurrency
- BONK PREDICTION. BONK cryptocurrency
- OP Token Drama: Can the Price Escape the Clutches of the Bears?
- DOGE PREDICTION. DOGE cryptocurrency
- Gold Rate Forecast
- EUR USD PREDICTION
- EDU PREDICTION. EDU cryptocurrency
- How Meme Coins Are Back, $TRUMP & $FARTCOIN Taking Over, and the Presales You Can’t Miss!
- USD KRW PREDICTION
- TRX PREDICTION. TRX cryptocurrency
2025-07-09 15:05