A Volatile Spring: Tariffs, Threats, and Reversals
April unfolded as a month of intense turbulence in financial markets, driven by a barrage of political manoeuvrings, economic uncertainty, and shifting monetary policies. Markets were rattled by elevated tariffs, escalating rhetoric, and retaliatory measures that prompted investors to reassess growth prospects, price in heightened recession risks, and retreat from riskier assets. The transatlantic divergence in monetary policy added fuel to the volatility. In Europe, the European Central Bank acted decisively, cutting rates amid fears of stubbornly weak inflation and faltering growth. Across the Atlantic, however, the Federal Reserve resisted calls for easier policy, citing concerns that tariffs could exacerbate inflationary pressures. This policy split created crosscurrents in credit markets already on edge from macroeconomic uncertainty.
