Investors Eye Fed and US-China Talks Amid Tariff Uncertainty

The Federal Reserve faces evaluation during its Wednesday meeting because it marks the first gathering since President Donald Trump introduced his April 2 “liberation day” tariffs. BlackRock’s Rick Rieder stated that tariffs will reduce economic growth because businesses and consumers remain cautious because of the uncertainty. According to Rieder the strong labor market combined with inflation makes rate cuts before July highly improbable. Market participants expect trade agreements to materialize before July when the 90-day tariff suspension ends while they watch US-China negotiations in Switzerland. Rieder emphasized that China stands as the central point because of its extensive economic relationships with the United States. The market reaction to tariff announcements will influence stock prices as well as interest rates and currency values. The S&P 500 experienced a positive reaction when Trump suspended non-China tariffs yet market volatility continues. The Federal Reserve will maintain current interest rates while tracking inflation risks that stem from tariffs throughout the economic period of trade disturbances.