GuShiio.com ① Trump said that the United States will announce next week to impose reciprocal tariffs on some countries, which may push up inflation and delay the Federal Reserve’s interest rate cut;
② Important economic data next week includes the U.S. CPI report, which may have a major impact on the market.
Financial Union, February 9 (Editor Niu Zhanlin)Amid the DeepSeek shock and Trump’s tariff threat, the three major U.S. stock indexes all closed down this week, ending a turbulent week. Next, the global market will continue to welcome the stormy storms.
The first thing that makes investors nervous is that U.S. President Trump said in a meeting with Japanese Prime Minister Shigeru Ishiba on Friday that the United States will announce reciprocal tariffs on some countries next week.
Trump pointed out: “I may hold a meeting on this next Monday or Tuesday to announce a decision, maybe a press conference. If they charge us, we charge them.”
Analysts warned that tariffs could push up inflation, further delaying the long-awaited Fed interest rate cut. A survey of more than 4000 traders released this week showed that inflation and tariffs are expected to be the two factors with the biggest impact on the market this year.
The U.S. CPI report due to be released next Wednesday will provide the latest data on inflation trends, which may have a major impact on the market. If inflation accelerates again, it is likely to trigger a new round of selling.
Charlie Ripley, senior investment strategist at Allianz Investment Management, said: “Inflation may have complex effects on interest rate policy and financial markets in 2025. If inflation rises again, the chances of the Fed continuing to cut interest rates will decrease, which obviously the market doesn’t like.”
Several Wall Street analysts warned that January is usually a more challenging period to forecast CPI due to seasonal factors, raising the possibility of market volatility after the data is released.
LSEG data shows that the market expects the possibility of the Fed leaving interest rates unchanged at its next meeting in March to be more than 80%, while interest rates are expected to be cut about twice by the end of this year.
But some investors are lowering expectations for further policy easing this year. Economists at Morgan Stanley said they now expect the Fed to cut interest rates only once this year in June, rather than the previous two, because uncertainty about tariffs has raised the threshold for rate cuts.
Lawrence Gillum, chief fixed income strategist at LPL Financial, commented: “In the early days of Trump’s second administration, tariff threats reignited market volatility.”
Federal Reserve Chairman Powell will attend a Senate Finance Committee hearing next Tuesday to deliver a testimony speech on the semi-annual monetary policy report. He will also attend a hearing before the House Financial Services Committee the day after that.
After the routine reading of testimony, Powell begins answering various questions from lawmakers, when the Fed’s interest rate path may become clearer.
Corporate earnings will also be the focus in the coming week, with companies such as Coca-Cola, Cisco and McDonald’s reporting results.
Anthony Saglimbene, chief market strategist at Ameriprise Financial, said that despite the uncertainty about tariffs, the earnings season is generally a positive factor for stocks. “Commentary from different industries is generally solid, and demand drivers remain intact.”
In terms of geopolitical situation, world leaders will attend next week’s Munich Security Conference. There are reports that the Trump administration will propose a peace plan to end the war between Russia and Ukraine.
Overview of next week’s important events:
Monday (February 10):Japan’s December trade account, Eurozone Sentix Investor Confidence Index in February, BYD held an intelligent strategy conference at its Shenzhen headquarters, and European Central Bank President Lagarde delivered a speech
Tuesday (February 11):U.S. January New York Fed’s one-year inflation expectations, France’s fourth-quarter ILO unemployment rate, U.S. January NFIB Small Business Confidence Index, Bank of England Governor Bailey delivered a speech, Cleveland Fed Chairman Hamack delivered a speech on the economic outlook, Federal Reserve Chairman Powell attended the Senate hearing
Wednesday (February 12):U.S. API crude oil inventories for the week to February 7, U.S. unseasonally adjusted CPI annual rate in January, U.S. unseasonally adjusted CPI monthly rate in January, U.S. unseasonally adjusted core CPI annual rate in January, U.S. EIA crude oil inventories for the week to February 7, U.S. EIA Cushing, Oklahoma crude oil inventories for the week to February 7, New York Fed President Williams delivered a speech, Federal Reserve Chairman Powell delivered semi-annual monetary policy testimony before the House Financial Services Committee, OPEC releases monthly crude oil market report
Thursday (February 13):U.S. 10-year Treasury bond auction from February 12-winning interest rate, Germany’s January CPI monthly rate, UK’s initial GDP annual rate for the fourth quarter, Switzerland’s January CPI monthly rate, U.S. unemployment claims for the week from February 8, U.S. unemployment benefits, U.S. January PPI annual rate, U.S. January PPI monthly rate, Atlanta Fed President Bostic delivered a speech on the economic outlook, IEA released monthly crude oil market report, Indian Prime Minister Modi visited Washington
Friday (February 14):Eurozone fourth-quarter GDP annual rate revised, US January retail sales monthly rate, US January industrial output monthly rate, Russia Central Bank announced interest rate decision
