讀後心得

On the 2nd, President Trump announced tariff measures, and on the 4th, the Chinese government responded strongly, deciding to impose a 34% tariff on all U.S. imports starting from the 10th. The global trade war has intensified, with the stock market suffering a two-day loss totaling 6.6 trillion dollars, causing both the S&P 500 and the Nasdaq indices to fall into bear markets. Federal Reserve Chairman Jerome Powell pointed out that the impact of the tariffs exceeds expectations, potentially leading to rising inflation and an economic slowdown, and emphasized that the effects of tariffs on the economy remain unclear. Rubio acknowledged the market collapse but stated that the economy is still functioning. The latest employment report shows that 228,000 jobs were added in March, and the labor market has not yet been affected, but investor confidence remains weak.

After President Trump's tariff measures were announced on the afternoon of the 2nd, the Chinese government decided to retaliate firmly on the 4th, announcing that it would impose a 34% tariff on all U.S. imports starting from the 10th. The ongoing global trade war has caused the stock market to experience dramatic declines for two consecutive days, with market losses skyrocketing to a record 6.6 trillion yuan. The Nasdaq index has dropped 22% from last year’s all-time high, officially entering a bear market for tech stocks.

The Chairman of the Federal Reserve, Powell, stated that the tariffs and their impact on the economy and inflation "far exceeded expectations," and that the U.S. economy faced risks of rising inflation and slowing growth. These remarks further battered the stock market. Trump called on Powell to cut interest rates on his social media platform, believing it to be the best timing for a rate cut, citing inflation and declining energy prices as reasons.

On the 4th, the S&P 500 index fell 6%, the Nasdaq index dropped 5.8%, and the Dow Jones Industrial Average decreased by 2,231 points. Significant stock market sell-offs indicated that investors were beginning to realize that high tariffs and the subsequent retaliatory actions were unlikely to improve the global economy or corporate profit outlook, and the consequences of the trade war stalemate were severe. This was the worst week for the stock market since 2020, with the Dow plunging more than 3,000 points this week, down 7.9%, entering correction territory. Meanwhile, the Nasdaq has entered a bear market, and the S&P 500 index has shrunk by 9.1%.

The latest jobs report showed that the U.S. economy added 228,000 jobs in March, suggesting that the previous uncertainty surrounding tariffs had yet to disrupt the labor market. However, the strong employment data did not instill much confidence in investors. Analysts at JPMorgan have already raised the probability of a global economic recession to 60%.

Secretary of State Rubio acknowledged that "the markets are collapsing," but believed that the economy was not collapsing and that global businesses would adapt to the new environment. Powell stated in a meeting that import taxes could "at least lead to a temporary rise in inflation," and that their effects might be more lasting. He emphasized the need to ensure that a one-time increase in prices does not turn into a persistent inflation problem.

Concerns about inflation indicate that the Federal Reserve may keep the benchmark interest rate around 4.3% in the coming months, rather than cutting rates in the short term. This is because higher borrowing costs help to slow economic growth and curb inflation. Additionally, Powell noted that the overall impact of tariffs on the economy remains unclear, and the Federal Reserve would remain cautious until the economic situation clarifies. He also mentioned that many businesses would pause new investments until they better understand the impacts of tariffs, stating during a Q&A session, "Many, including us, are waiting and watching. In such uncertain times, this seems to be the right thing to do."

Powell's description of the impact of tariffs appears more negative compared to March, when he indicated that any inflation caused by tariffs might be temporary.