Trump's Policies Trigger Market Hesitation: Tariffs, Investment Curbs, and Fed's Cautious Stance

Following the US election 2024, President Trump's "America First Investment Policy" is raising concerns. UBS reports potential restrictions on US funds investing in specific Chinese stocks, particularly in high-tech sectors like AI and advanced manufacturing. China's Commerce Ministry urges the US to avoid politicizing economic issues. Trump reiterated plans to impose 25% tariffs on Mexico and Canada, scheduled for March 4. Markets show reluctance to overreact, citing Trump's history of policy reversals. The NASDAQ fell by over 1%, partly due to profit-taking before Nvidia's results and concerns about competition from China's DeepSeek in AI technology. Chicago Fed President Austan Goolsbee stressed caution regarding rate cuts, citing uncertainty about the economic impact of Trump's policies, including tariffs, immigration, and spending changes. He indicated the Fed would respond if policies push inflation higher. BoE's Swati Dhingra advocated for faster rate cuts, citing weak consumer spending and arguing that current policy remains overly restrictive.