Trump's Macro Moves: Tariffs, Iran Tensions Drive Inflation Fears, Pressure Risk Assets

Trump's threats against Iran after Houthi attacks jolted markets, pushing Brent crude above $100. This surge ignites inflation concerns, potentially delaying central bank rate cuts and tightening policy. A new wave of tariffs, 10-12.5% on 60 economies including China and the EU, broadens the economic impact. These measures hike costs for businesses, likely passed to consumers, sustaining elevated inflation and complicating the Fed's path to easing. Additional 50% tariffs on Canadian goods add another layer of trade friction, risking retaliation and North American supply chain disruption. This further pressures corporate margins and consumer prices. Defense contractors face tighter restrictions on Chinese components, while aluminum tariffs now link relief to US investment. These policies aim to bolster domestic production but could increase costs across industries, from automotive to construction. The cumulative effect of these actions — higher inflation, delayed rate cuts, and increased geopolitical uncertainty — creates a challenging environment for risk assets. Bitcoin and broader crypto markets are feeling the squeeze as investors de-risk.