Global Markets Slide Sharply Amid Rising Recession Fears

Investors respond to Powell’s warning on trade war fallout; global uncertainty deepens as tariffs and inflation risks mount.

Global financial markets experienced a sharp downturn last week as concerns about a potential recession intensified. The drop followed comments from Federal Reserve Chairman Jerome Powell, who warned that the economic impact of the ongoing U.S.-China trade dispute could be more serious than previously expected.

Stock indices in the United States, Europe, and Asia all closed lower. Investors moved quickly to reduce their exposure to risk, leading to broad-based sell-offs across major sectors.

Trade Policies Drive Volatility

President Donald Trump’s tariff policies remain at the center of investor concern. The administration’s push for “America First” trade measures has raised the costs of imported goods. These rising costs are expected to contribute to inflation, placing additional pressure on consumers and businesses.

Analysts caution that extended trade disputes may slow global economic growth. Many companies are expected to cut back on investments, while corporate earnings could weaken in the months ahead.

Retaliation from China Increases Uncertainty

Tensions escalated further when China announced new tariffs on U.S. goods. In response, the U.S. signaled its willingness to take even stronger measures. The back-and-forth actions have heightened fears that a prolonged trade war could cause lasting damage to global markets.

Powell’s remarks highlighted the risk that higher prices from tariffs could push inflation upward. This could complicate the Federal Reserve’s monetary policy decisions in the coming quarters.

Eyes on Inflation and Fed Guidance

Despite ongoing economic resilience in the United States, including strong employment numbers, policy uncertainty is beginning to affect business confidence. Economists warn that continued volatility may slow growth if consumer spending and investment decline.

Investors are now focused on upcoming data releases. The U.S. inflation report and the Federal Reserve’s meeting minutes will offer key insights into how central bankers view the current risks.

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