Weekly economic commentary: Trade tensions persist

Wells Fargo Research Team Wells Fargo

Summary

United States: Thank you for your attention to this matter!

Economic data releases took a back seat to trade policy changes again this week, with President Trump declaring a 90-day pause on many of the “reciprocal” tariffs announced on April 2. The pause still leaves the United States in a materially higher tariff environment than any time in the past century. Inflation data for March were softer than expected and sentiment data continued to deteriorate. Congressional Republicans moved forward with a reconciliation bill that promises fiscal stimulus in 2026.
Next week: Retail Sales (Wed.), Industrial Production (Wed.), Housing Starts (Thu.)

International: Foreign central banks in dovish mood as trade tensions persist

Foreign central banks remained in an overall dovish mood this week amid ongoing trade uncertainties, as the Reserve Bank of New Zealand, Reserve Bank of India and Philippine central bank all lowered interest rates, while suggesting further easing to come. Mexico's benign CPI should also see another rate cut in May, while firm inflation and activity data should see Brazil's Cental Bank hike rates at its next meeting.

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Wells Fargo Research Team

Wells Fargo

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