Markets on Edge: Tariffs, Inflation, and Powell’s Warning

Steel Tariffs, Inflation Data, and Fed Testimony — Key Market Moves You Need to Know.

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Market Mastery Digest
February 17, 2025

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Markets React as the Fed Holds the Mic

Hey there, Market Mastery crew! 👋

It’s been another action-packed week, with tariffs making headlines, inflation staying stubborn, and the Fed playing the waiting game.

The markets have been reacting to every twist and turn, and traders everywhere are trying to figure out what’s next.

Let’s break it all down so you’re prepared for what’s ahead.

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Monday saw another round of tariffs, this time a 25% duty on steel and aluminum imports, as part of the administration’s ongoing push for domestic production.

While this isn’t the first tariff shake-up this year, it sent another ripple through the markets, adding pressure on industries that rely on imported materials.

The tariff takes effect on March 12, leaving investors and businesses scrambling to assess the impact.

Midweek, traders got another reality check with the January CPI report, showing a 3% annual rise in inflation, outpacing forecasts.

Housing, food, and gasoline prices continued to climb, keeping inflation sticky and making it clear that price pressures aren’t fading anytime soon.

This sent bond yields higher and kept rate cut expectations in check.

Federal Reserve Chair Jerome Powell took the hot seat in Congress this week, facing tough questions about the Fed’s next moves.

His message?

The fight against inflation isn’t over yet, and rate cuts aren’t coming until the data shows meaningful improvement.

Markets wobbled as traders adjusted their expectations, but Powell stuck to his usual “data-driven” approach.

As the week came to a close, the White House announced a plan for reciprocal tariffs on countries with value-added tax (VAT) systems, aimed at leveling trade imbalances.

But in a surprising move, the administration delayed implementation, giving markets a temporary sigh of relief — though uncertainty still lingers.

On Friday, the S&P 500 index closed just shy of its all-time high, capping off a week marked by significant economic events.

Despite concerns over tariffs and inflation, the resilience of the market suggests investor confidence remains strong.

The delayed implementation of reciprocal tariffs provided a temporary boost, while robust earnings reports from companies like Airbnb contributed to the positive momentum.

Despite a holiday-shortened week due to Presidents' Day on Monday, several significant events are on the horizon:

Earnings Reports

Major companies like Walmart, Alibaba, Baidu, Carvana, and Rivian are set to release their earnings.

Federal Reserve Meeting Minutes

The release of the latest meeting minutes will provide clarity on the central bank's stance on interest rates and future monetary policy.

Housing Market Data

Reports on housing starts and existing home sales will shed light on the current state of the real estate market.

Consumer Sentiment and Manufacturing Surveys

Updates on consumer confidence and regional manufacturing activity will offer additional perspectives on economic health.

Markets are moving fast, and every headline is influencing price action.

Whether it’s tariffs, inflation, or Fed decisions, your best weapon is knowledge.

Stay ahead of the game, keep your strategies flexible, and be ready for whatever the markets throw at us next.

We’ll be back soon with more insights — until then, trade smart and stay focused! 🚀