Just a year ago, worse-than-expected consumer inflation data in the United States could have caused a storm of negative emotions in the financial markets. But certainly not today, when all the world’s attention is focused on a veritable storm of presidential decrees, orders, statements, phone calls, and promises on social media that can turn not only the markets but the entire world upside down. Yet, sooner or later, any political storm ends and the life of the financial world returns to fundamental values, among which central bank inflation control is perhaps one of the most important. This is a quick review from Ivan Kompan, Edinburgh Business School analyst.
Inflation & Fed’s Response. On Wednesday, U.S. inflation rose to 3%, the highest in six months and above expectations. Markets initially reacted negatively, but Fed Chair Powell remained calm, attributing the increase to seasonal factors, including minimum wage hikes. Despite inflation steadily rising since September, Wall Street analysts still see progress. Rate cut expectations have now shifted to September, as a strong labor market offers no compelling reason for earlier action—unless Trump demands it.
Musk’s Influence & AI Battles. Musk continues shaking things up. His team’s government restructuring efforts led to 75,000 voluntary resignations, with more layoffs expected. Meanwhile, Musk and investors offered $97 billion for OpenAI, but Sam Altman rejected the bid, valuing the company at $260 billion. To taunt Musk, Altman offered to buy X (Twitter) for $9.7 billion—far less than Musk paid. In response, Musk hyped his AI platform, Grok 3, as the world’s best. If Grok is so great, why the $97B offer?
Trade Wars Escalate. Trump’s tariff war continues. This week, he announced new tariffs on steel, aluminum, and “reciprocal” tariffs on all trade partners, set to take effect in April—unless countries strike deals with him first. Global trade tensions are heating up.
Apple & Alibaba Team Up. Amid trade battles, Apple and Alibaba announced a partnership, largely due to China’s demand for Apple to work with a local firm on AI development. While a forced alliance, it may help Apple regain ground in China, where Huawei is gaining traction. Investors saw it as a win—Apple, Alibaba, and Chinese stocks surged, with the Hang Seng Index up 7% this week.
Market Optimism Prevails. Despite inflation, high Fed rates, and geopolitical uncertainty, markets remain bullish. Some analysts believe this optimism could last into the 2030s. While Trump reshapes the world in his rapid-fire style, the bulls keep running.
*And finally, we would like to remind you that the information you have just listened to is not an investment advisory. Remember – investments in the stock market are always tied up with financial risks. So be careful and cautious.
