The PULSE: Global Economic and Market News for February 12, 2025

On February 12, 2025, the global economic landscape is marked by rising inflation, shifting trade policies, and dynamic market responses. In the United States, consumer prices surged in January, recording the most significant increase in nearly 18 months. This uptick, driven by higher shelter, food, and gasoline costs, has reinforced the Federal Reserve's cautious stance on monetary policy. Chair Jerome Powell emphasized that, despite a robust economy, the central bank is in no hurry to cut interest rates, especially with inflation exceeding the 2% target. reuters.com

Financial markets reacted promptly to these developments. The S&P 500 index declined as investors anticipated that the persistent inflation might lead to a more prolonged period before the Federal Reserve considers rate cuts. Simultaneously, the bond market experienced a sell-off, with U.S. Treasury yields rising, reflecting expectations of sustained higher interest rates. reuters.com

The U.S. administration's recent imposition of new tariffs has escalated tensions on the trade front. On February 1, 2025, President Donald Trump announced a 10% tariff on imports from China, aiming to address trade imbalances and concerns over fentanyl trafficking. In retaliation, China implemented export controls and increased tariffs on certain American imports, signaling a potential intensification of the trade dispute. en.wikipedia.org

In parallel, the U.S. has imposed a 25% tariff on all steel and aluminum imports, effective February 10, 2025. This move has raised concerns about potential retaliatory actions from trading partners and the broader implications for global trade dynamics. reuters.com

The energy sector is also navigating these complex dynamics. The Organization of the Petroleum Exporting Countries (OPEC) has maintained its forecast for robust global oil demand growth in 2025 and 2026, projecting increases of 1.45 million barrels per day (bpd) and 1.43 million bpd, respectively. This outlook is based on sustained demand from air and road travel. However, OPEC has also highlighted potential risks stemming from recent U.S. trade policies, which could introduce uncertainties in the market, prompting a cautious approach. reuters.com

In the United States, crude oil prices have experienced downward pressure. Factors contributing to this trend include rising U.S. crude stockpiles and the Federal Reserve's cautious stance on interest rates. Additionally, geopolitical developments, such as President Trump's discussions with Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy regarding the war in Ukraine, have influenced market sentiment. reuters.com

The electric vehicle (EV) sector continues to exhibit significant growth on a global scale. In January 2025, global sales of EVs and plug-in hybrid cars increased by 18% year-over-year. This growth was particularly pronounced in Europe and the United States, surpassing China's development for the first time since February. Europe's strong performance is attributed to new CO2 emission targets, while the U.S. market benefited from increased consumer adoption. Conversely, Chinese sales declined by 43% month-over-month due to the Chinese New Year. reuters.com

As the global economy navigates these intertwined developments, stakeholders closely monitor the implications for economic planning and investment strategies. The interplay between inflationary pressures, trade policies, and market dynamics underscores the complexity of the current economic environment, emphasizing the need for expert advice in decision-making.

Disclosure

This article is for informational purposes only and should not be considered investment, financial, legal, or tax advice. The information contained herein is based on publicly available sources believed to be reliable; however, no representation or warranty, expressed or implied, is made as to its accuracy, completeness, or correctness.

The content of this article does not constitute an offer to buy or sell any securities or other financial instruments, nor does it provide specific investment recommendations. Past performance is not indicative of future results. Market conditions are subject to change, and investors should conduct their own due diligence or consult with a qualified financial professional before making any investment decisions.

Duncan Williams Asset Management (DWAM) and its affiliates do not assume responsibility for any losses or damages resulting from reliance on the information provided. Investing involves risks, including the potential loss of principal. Any forward-looking statements are based on current expectations and are subject to risks, uncertainties, and changes that could cause actual results to differ materially.

Sources

·       U.S. Inflation and Federal Reserve Outlook: "U.S. consumer prices increased more than expected in January, reinforcing expectations the central bank will be in no rush to resume cutting interest rates." https://www.reuters.com/markets/us/hotter-january-inflation-jolts-markets-dimming-rate-cut-hopes-2025-02-12/

·       Market Reactions: "The S&P 500 index declined as investors anticipated that the higher-than-expected inflation figures might lead to a more prolonged period before the Federal Reserve considers rate cuts." https://www.reuters.com/markets/us/futures-subdued-lead-up-latest-inflation-test-2025-02-12/

·       Global Trade and Tariff Developments: "On February 1, 2025, President Donald Trump announced a 10% tariff on imports from China, aiming to address trade imbalances and concerns over fentanyl trafficking." https://en.wikipedia.org/wiki/Second_Trump_tariffs

·       Energy Markets: "OPEC has maintained its forecast for robust global oil demand growth in 2025 and 2026, projecting increases of 1.45 million barrels per day (bpd) and 1.43 million bpd, respectively." https://www.reuters.com/markets/commodities/opec-sticks-2025-2026-global-oil-demand-growth-forecasts-2025-02-12/

·       Electric Vehicle Market Trends: "In January 2025, global sales of EVs and plug-in hybrid vehicles increased by 18% year-over-year." https://www.reuters.com/business/autos-transportation/global-electric-vehicle-sales-up-18-january-2025-02-12/

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