FT News Briefing
Emerging markets’ surprising performance
Apr 17, 2025
Federal Reserve chair Jay Powell highlights how U.S. tariffs threaten inflation and employment goals. Meanwhile, UK inflation unexpectedly dips to 2.6%. Emerging markets are showcasing surprising resilience amid market volatility, presenting intriguing investment opportunities. The podcast also discusses the impact of price fluctuations and ongoing challenges within the chip industry, particularly for key players like NVIDIA and ASML, shedding light on the broader implications for the AI sector and stock market dynamics.
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Quick takeaways
- Fed Chair Jay Powell cautioned that U.S. tariffs may jeopardize inflation and employment objectives, complicating economic stability.
- Emerging markets are outperforming U.S. stocks due to a weaker dollar and shifts in global trade dynamics, presenting unique investment opportunities.
Deep dives
Impact of Tariffs on the Federal Reserve's Goals
The tariffs imposed by Donald Trump are complicating the Federal Reserve's dual mandate of maintaining inflation around 2 percent and maximizing employment levels. Fed Chair Jay Powell highlighted the potential for tariffs to lead to increased inflation, creating a challenging scenario where the Fed might need to raise interest rates to control prices, risking a slowdown in the economy. As a result, U.S. stocks experienced a decline, with the S&P 500 closing down over 2 percent shortly after Powell's remarks. This situation underscores the intricate relationship between trade policies and economic stability, particularly as tariffs continue to escalate.
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