Fed rethinks path amid tariff shock

U.S. Markets

Federal Reserve Governor Christopher Waller described the White House’s fresh wave of tariffs as among the most disruptive policy shifts in decades. With average import duties now sitting around 25%, Waller warned that inflation could push toward 5%, forcing the Fed to consider accelerated rate cuts if growth stalls. The market is increasingly pricing in earlier easing, with rate expectations shifting in tandem with rising recession fears tied to the escalating U.S.-China standoff.

EUR/USD

The EUR/USD pair remains under pressure, dipping toward 1.1350 in Tuesday’s European session. Traders await fresh data from Germany and the Eurozone, with the pair caught between euro-area fragility and dollar strength.

Commodities

Gold continues to hold strong near historic levels, trading just below the all-time high of $3,245.42 per ounce early Tuesday. Despite some hesitation in fresh buying, investor appetite remains elevated.

Chinese gold ETFs saw record-breaking inflows—29.1 metric tons in the first 11 days of April alone—eclipsing Q1’s total and outpacing their U.S. counterparts (27.8 tons). While Trump’s temporary tariff relief for consumer electronics and a possible carve-out for the auto sector have buoyed risk sentiment, concerns over long-term economic fallout from trade tensions continue to support the metal.

WTI crude prices are holding steady, as President Trump signals possible tariff exemptions for the automotive sector, offering mild relief to energy markets. Meanwhile, China's March crude imports rose nearly 5% year-on-year, partly due to increased flows from Iran. On the supply side, OPEC+ cut its demand growth forecasts for both 2025 and 2026, reflecting a more cautious outlook amid shifting geopolitical and economic headwinds.