Bloomberg Daybreak: Asia Edition US Futures Higher on Trade Talk Optimism
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Jun 30, 2025 Shams Afzal, Managing Director at Carnegie Investment Counsel, shares insights on the current U.S. equity market amidst rising trade talk optimism. With key negotiations looming, he discusses the effects of tariffs on global economies, inflation, and the implications for future trade deals. As central bankers gather in Portugal, he highlights the interconnected challenges facing Asian economies and delves into China's economic outlook, particularly its stability amidst uncertainty and influence on global trade.
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Persistent Trade Uncertainty
- The ongoing trade uncertainties will likely persist throughout 2025, not improving beyond current levels.
- Markets seem to underreact to these tensions, showing a form of analgesia to trade stress since April 2nd.
Inflation Dynamics and Fed Outlook
- Despite inflation from tariffs, easing in housing inflation is balancing overall inflation pressures.
- The Fed may be comfortable with current inflation, supporting at least two rate cuts this year.
Stagflation Risk and AI's Economic Role
- There is always stagflation risk with current GDP growth near 1.5% or lower.
- AI's robust impact is expected to keep U.S. economy growing above 1% GDP in the second half of the year.