In global markets, last week was dominated by a negative trend due to the impact of the auto tariffs announced by US President Donald Trump, shifting focus next week to US employment data and reciprocal tariffs.

The upcoming employment data is expected to provide more information about the uncertainties overshadowing the US economy, while the implications of the tariff steps taken and to be taken by Trump on the global trade system are closely monitored. Trump signed an executive order last week imposing a 25% import tariff on imported cars and trucks to increase domestic production. Speaking at the signing ceremony at the White House, Trump described it as the “beginning of America’s day of liberation.” He reiterated that the real liberation day for the US would be April 2 when reciprocal tariffs will be announced, with the auto tariffs taking effect on that date. Trump said, “We start collecting on April 3.” He also mentioned that they would impose tariffs on drugs to bring the industry back to the country. Alongside the reciprocal tariffs to be announced next week, potential retaliatory announcements from US trading partners are expected to have an impact on global risk perception.

While reactions to the US president’s tariff decision towards the auto industry came from many countries last week, it was reported that the European Union (EU) is preparing measures against the new tariffs on imported cars from the US. Concerns about tariffs increase uncertainties regarding the steps the Federal Reserve (Fed) will take in the future. Austin Goolsbee, President of the Chicago Fed, stated last week that the next interest rate cut might be delayed due to economic uncertainty. Neel Kashkari, President of the Minneapolis Fed, expressed his uncertainty about the impact of tariffs on the US economy, noting that the possibility of raising prices requires higher interest rates, whereas slowing economic growth requires reducing borrowing costs. Kashkari stated that until the situation becomes clearer, the Fed may need to stay in place for an extended period in monetary policy. Alberto Musalem, President of the St. Louis Fed, mentioned that it is not clear whether the effects of tariffs will be temporary, and indirect effects may require interest rates to be kept steady for a longer period. Susan Collins, President of the Boston Fed, stated that the tariffs imposed by the Trump administration would accelerate inflation in the US, but it is uncertain how long-lasting this effect would be.

Regarding macroeconomic data, the growth rate of the US economy in the last quarter of last year was revised upwards. According to this, the US economy recorded growth above expectations with 2.4% in the final quarter of 2024. The core personal consumption expenditures price index, which the Fed considers as an inflation gauge, rose by 0.4% monthly and 2.8% annually in February. The monthly increase rate in the index hit its highest level since January 2024. The core personal consumption expenditures price index, which was expected to rise by 0.3% monthly and 2.7% annually, exceeded market expectations. The consumer confidence index measured by the University of Michigan was revised downwards to 57 in March, reaching its lowest level since November 2022. Short-term inflation expectations of consumers increased from 4.3% to 5% in March, reaching the highest level since November 2022. Long-term inflation expectations also rose from 3.5% to 4.1%, the highest rate recorded since February 1993. With these developments, the yield on the 10-year US Treasury bond was 4.26%, and the dollar index was balanced at 104.0 level last week. Concerns about the consequences of President Trump’s aggressive tariff policies, increased geopolitical risks, central bank purchases, and strong alt…