讀後心得

After President Trump announced new tariff measures, the Chinese government retaliated by deciding to impose a 34% tariff on all American imports starting from the 10th. This intensified the global trade war, resulting in a significant stock market decline, with market losses reaching $6.6 trillion, and technology stocks entering a bear market. Federal Reserve Chairman Powell stated that the impact of the tariffs exceeded expectations and could lead to rising inflation and a slowdown in economic growth. The stock market faced a severe setback, with the Dow Jones Industrial Average dropping 2,231 points, the S&P 500 index falling by 6%, and the Nasdaq index suffering a decline of as much as 5.8%. Despite the latest employment report showing an addition of 228,000 jobs in March, investors remained uneasy. Powell emphasized that the market is in a wait-and-see mode and did not rule out the possibility of long-term effects.

President Trump announced a series of tariff measures on the afternoon of the 2nd, to which the Chinese government responded strongly on the 4th, deciding to impose a 34% tariff on all U.S. imports starting from the 10th. In the context of a global trade war that cannot be quickly resolved, the stock market fell sharply for two consecutive days, with market losses soaring to a record 6.6 trillion yuan at one point. The Nasdaq index dropped 22% from its historical peak set in December of last year, with tech stocks officially entering a bear market.

The Federal Reserve Chairman stated that the tariffs and their impact on the economy and inflation "far exceed expectations," suggesting that the U.S. economy could face the possibility of rising inflation and slowing economic growth. These remarks further weighed on the stock market. Trump called for interest rate cuts on his social media platform, citing declining inflation and energy prices, emphasizing, "This is the best time for rate cuts," expressing dissatisfaction with the cautious decisions.

On the 4th, the S&P 500 index fell by 6%, the Nasdaq index dropped by 5.8%, and the Dow Jones Industrial Average plummeted by 2,231 points. The sell-off in the stock market reflected investors' concerns about the extremely high tariffs and the subsequent retaliatory actions, recognizing that these actions would be detrimental to the global economy or corporate profit prospects, resulting in serious consequences from the trade war deadlock. This was the worst week for the stock market in a week, with the Dow down over 3,000 points, or 7.9%, this week. The Nasdaq has already fallen into a bear market, while the S&P 500 index has shrunk by 9.1%.

The latest employment report indicated that the U.S. economy added 228,000 jobs in March, and the previous uncertainties regarding tariffs did not seem to have impacted the labor market yet. However, the strong employment report did not instill confidence in investors. Analysts at JPMorgan have also raised the probability of a global economic recession to 60%.

The Secretary of State acknowledged that "the market is collapsing," but noted that the economy is not collapsing, and global businesses will adapt to the new environment. The Federal Reserve Chairman mentioned at a meeting that import taxes may "at least lead to a temporary rise in inflation," but their impact could be more lasting. He emphasized that the Fed has the responsibility to ensure that this one-time price increase does not evolve into a persistent inflation problem. This suggests that the Fed may maintain the benchmark interest rate around 4.3% in the coming months rather than cut rates in the short term, as higher borrowing costs would help slow economic growth and curb inflation.

Many companies have also indicated that they will temporarily halt new investments until they further understand the impact of the tariffs. In the Q&A session, he stated, "Many people are waiting and watching. In this uncertain time, this seems to be the right approach." Compared to statements made in March, this overall description of the impact of tariffs is more negative. At that time, he believed the inflation impact caused by tariffs might be temporary.

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