Trump's recent tariff policy not only damaged confidence in the US economy but also shook investors' trust in US policy direction and US dollar assets. Even by Wall Street's long historical standards, this was a brutal trading week, with US stocks riding a roller coaster, and the trend of US Treasury bonds and the US dollar suggesting that its safe-haven status might be at risk
VX：TZ7971
A Historic Week
On Monday, due to a supposed tariff rumor, US stocks experienced a 15-minute pulse-like massive shock, with Nasdaq briefly surging 10% from its low, and US Treasury bonds plummeting.
On Tuesday, news of no tariff exemptions crushed hopes of a stock market rebound, with the Dow dropping over 2,000 points intraday, S&P erasing over 4% gains and turning negative, while the US Treasury market experienced a deleveraging massive sell-off.
On Wednesday, the US temporarily suspended some tariffs, with the three major US stock indexes rising at least 8%, S&P recording its largest gain since 2008, and US stock trading volume hitting a historical high of 3 billion shares. The 10-year Treasury yield rose and then fell back.
On Thursday, global investors fled US assets, with a triple hit on US stocks, bonds, and currency. Nasdaq fell over 4%, the US dollar experienced its largest daily drop in two years, and gold reached a new high.
On Friday, with the Federal Reserve hinting at intervention, US stocks rebounded and closed higher, but the continued decline of US Treasury bonds and the US dollar warned that its safe-haven status might be in jeopardy.
The US stock market fluctuated like an Altcoin, and the world became a massive pump and dump game.
Unexpected developments from the US did not stop there. March CPI data was far below expectations: year-on-year increase was only 2.4%, lower than market predictions, and even decreased by 0.1% month-on-month. Core CPI was equally disappointing, reaching a four-year low. Unadjusted core CPI year-on-year increase was 2.8%, declining for the second consecutive month, reaching its lowest level since March 2021, below the market expectation of 3.0%.
These two sets of data not only surprised the market but also prompted investors to reassess the Federal Reserve's policy outlook. Market reactions were swift:
Spot gold initially rose $6, then pulled back;
The US dollar index dropped 20 points short-term;
Pound sterling against the US dollar expanded its daily gain to 1.00%.
Facing such data, the market now believes a Fed rate cut in June is almost a certainty.
Under normal circumstances, a slowdown in year-on-year CPI growth would be seen as positive news.
This is naturally good news for the crypto market. With the Federal Reserve's benchmark rate falling, the crypto market may usher in a new round of value reassessment.
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