Charting the global economy: Turbulence accompanies tariff pause

(Bloomberg) --In the days following President Donald Trump’s mid-week decision to pause the stiffest of US tariffs — save for super-high duties on China — global financial markets remained turbulent, with investors seeking safe harbor and some central banks lowering interest rates.

Economic data in the US showed inflationary pressures diminished before broad tariffs kicked in on trading partners as well as certain sectors. Fresh consumer sentiment data illustrated increasing stress on Main Street, threatening the biggest part of the economy and helping explain why Wall Street see greater odds of a recession.

Instead of the typical scramble into US Treasury securities, investors raced away while the dollar sank — calling into question America’s status as the world’s safe haven. Crude oil prices remained weak on demand concerns, while the price of gold soared.

Meanwhile, central bankers in India and New Zealand lowered interest rates and signaled they stand ready for further cuts to help blunt tariff-related hits to their economies.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

World

Bloomberg

A global economy forecast to churn out $115 trillion in output this year must now contend with twin colliding shocks from its two biggest growth engines. Few will escape unscathed.

Bloomberg

America’s trading partners around the globe reacted with a mixture of relief and bewilderment to Trump’s eleventh-hour decision to pause some of his most aggressive tariffs. As government officials worldwide try to divine what would convince Trump to grant them permanent waivers, his newly demonstrated willingness to abruptly reverse course — or in China’s case, to apply additional pressure by hiking tariffs to 145% — inserts another layer of uncertainty.

Bloomberg

Gold’s latest surge to fresh records has been fueled by a rush of buying activity in daily auctions — a sign that major players in the market are still adding to their holdings even at all-time high prices. Bids for more than 400,000 ounces of gold were registered in the opening round of the afternoon auction on Thursday. Traders and analysts typically associate major buying or selling activity in the auctions with central banks, which have been a key driver as prices soared above $3,000 an ounce.

Bloomberg

New Zealand lowered borrowing costs for a fifth straight meeting, while India and the Philippines also reduced rates and signaled addition easing. Kenya cut its key rate by more than expected amid heightened geopolitical risks from tariffs. Israel’s central bank kept interest rates steady for a 10th straight meeting, while Romania, Kazakhstan, Peru, Serbia also held. Uruguay raised rates.

US

Bloomberg

US inflation cooled broadly in March, indicating some relief for consumers prior to widespread tariffs that risk contributing to price pressures. The slowdown reflected a decline in energy costs, used vehicles, hotel stays and airfares. The cost of motor vehicle insurance — a main source of inflation in recent years — also retreated.

Bloomberg

Consumer sentiment tumbled to the second-weakest reading on record while short- and long-term inflation expectations soared to multi-decade highs on growing tariff concerns.

Bloomberg

Treasuries slid for a fifth straight day as investors pulled back from US assets, sending longer-dated yields toward one of the biggest weekly jumps since the 1980s. The rout, which was set off by the trade war that’s shaken global markets, is threatening to deal another hit to the economy by pushing up borrowing costs more broadly.

Bloomberg

Higher interest rates and debt levels, along with pandemic-led disruptions to jobs and incomes, have made it more difficult for many US property-owners to tap home-equity loans and lines of credit, according to data from Point, a home-equity investment company.

Europe

Bloomberg

Britain’s economy posted the strongest growth in almost a year in February as factories ramped up production ahead of Trump’s wave of tariffs that have brought turmoil to global markets. Gross domestic product rose 0.5% after stagnating in January. Growth was partially driven by a shock 2.2% surge in manufacturing production, as UK goods exports to the US hit the highest level since late 2022.

Bloomberg

The UK’s borrowing costs surged this week to the highest since 1998 as a jump in long-dated US rates radiated around the world. At the same time, the pound slumped to its lowest in one year against the euro.

Asia

Bloomberg

China retaliated against Trump’s latest tariffs by hiking duties on all US goods, while calling the administration’s actions a “joke” and saying it no longer considers them worth matching. Beijing will raise tariffs on all US goods from 84% to 125% starting April 12, the Ministry of Finance said on Friday, after the White House clarified that levies on Chinese goods rose to 145% this year.

Bloomberg

China’s consumer deflation extended for a second month in March, as an escalating trade war with the US threatens to put more downward pressure on prices. Factory deflation persisted for a 30th month, with the producer-price index recording a faster drop of 2.5% compared to 2.2% in February.

Bloomberg

Asian governments from South Korea to Indonesia are rushing to sign up for liquefied natural gas purchases from the US, hoping to reduce trade surpluses with the world’s largest economy and secure some relief from US tariffs. Japan, South Korea and Taiwan have all said they are considering investments in a long-delayed $44 billion LNG export project in Alaska backed by Trump.

Emerging Markets

Bloomberg

Brazil’s annual inflation hit the highest level in two years and economic activity rose more than expected, pressuring central bankers as they mull the size of their next rate hike. The surge in inflation has the central bank poised to take the key rate, now at 14.25%, even higher. Its efforts to get cost-of-living increases under control are being blunted by wild swings in Brazil’s currency and hot household demand.

Bloomberg

The Audi Q5 is the German brand’s top-selling vehicle in the US. It’s also a prime example of how Trump’s drastic reordering of global trade is wreaking havoc on automakers. The rising trade barriers are threatening sales and upending supply chains that automakers have built over decades.