The very controversial US July 2025 jobs report presented signs of red-flag that the US economy is inching closer to a disatsrous recession. Donald Trump may have just succeed in torpedoing the US economy with his self-proclaimed victories with the trade negotiation and imposing tariffs with a base line of at least 10% against global trading partners and increasing import costs of materials and finished goods that its own US business owners will have to eventually pass through to US consumers. Inflation will certainly soar and given the worsening US job markets, Powell will need to make a difficult choice of whether to increase interest rates to stop inflation or cut interest rates to reignite the US economy engine.
The reduction in purchasing power of US consumers will not just have a drastic impact back in US but also affect global economies such as Singapore which depends a lot on exports to thrive. Looks like we are in for a thunder storm with the erratic and unpredictable Trump policies era. The risk of US entering into a long period of stagflation is ever increasing despite the S&P500 breaching the impressive 6,000 points mark.
Parting Thoughts- Personal
I am certainly curious as to Powell's next course of action and most folks are projecting that he will have no choice but to starting cutting borrowing rates in the next Fed meeting. If so, it maybe good to load up on more hedged US bonds and also Real Estate Investment Trust.
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