US President Donald Trump’s tariff policies are proving detrimental to the country’s economy. The US stock market, which initially showed enthusiasm for Trump’s decisions, is now facing sharp declines. Following Tuesday’s losses, Wednesday also witnessed a market downturn, signaling growing concerns over the economic impact of these policies.
Interest Rate Cuts in Jeopardy
Larry Fink, CEO of BlackRock, the world’s largest asset management company, has issued a statement that could heighten concerns among American citizens and investors. He believes that Trump’s trade policies will lead to increased inflation, making it difficult for the Federal Reserve to cut interest rates. If interest rate cuts do not materialize, stock market declines could continue.
According to Forbes, Fink stated, “Being nationalist is good, but I believe tariff policies could lead to higher inflation in the country.” Trump has been making frequent statements regarding his tariff policies, which have strained the US’s relationships with Canada, Mexico, and China. While US-China relations were already tense, the impact on Canada and Mexico could prove costly for the US. Additionally, Trump has threatened Europe with tariffs, further escalating global trade tensions.
Recession Fears Intensify
Economists at Goldman Sachs have raised the probability of a recession in the next 12 months from 15% to 20%, citing Trump’s economic policies as a primary risk. Similarly, Yardeni Research has increased the recession probability from 20% to 35%. This has led to speculation that the Federal Reserve may refrain from cutting interest rates in its upcoming meeting, which could have widespread effects on global markets.
Crypto Market Decline
Trump’s policies are not only affecting the US stock market but also shaking the cryptocurrency market. Over the past month, the crypto market has lost $1 trillion in value, with Bitcoin being hit particularly hard. Once surpassing the $100,000 mark, Bitcoin has now dropped to $81,833.84, representing a 14.38% decline in just one month. Analysts fear that the instability caused by Trump’s policies could drive crypto markets even lower.
Gold Prices on the Rise
While stock and crypto markets are struggling, gold remains a safe haven for investors. Experts believe that global instability resulting from Trump’s policies will drive increased investment in gold. Previously, disheartened investors from the stock market turned to crypto, but with both markets in turmoil, gold has become the preferred investment choice.
Current Gold Prices
In India, gold prices have surged today. According to Good Returns, the price of 24-carat gold (10 grams) reached ₹87,980 on March 12, up from ₹87,490 on March 11. Similarly, silver prices have hit ₹1,00,000 per kg, marking a direct increase of ₹2,000.
Gold prices in India are not solely influenced by domestic demand and supply but also by global economic developments. Major international markets such as the London OTC Spot Market and COMEX Gold Futures Market play a significant role in determining gold prices.
