Next week is expected to be a major challenge for the Federal Reserve (Fed) as the CPI is likely to exert significant pressure. The USD index could fall into a deep decline if market sentiment does not improve. The situation became tense after President Trump announced tariff proposals, increasing concerns about global growth and causing a sharp decline in the US stock market.
Last Friday, the S&P 500 lost an additional $1.5 trillion in market value, bringing the total loss over two trading days to $3.5 trillion. This was a major shock for large tech companies, causing the Nasdaq to drop over 20% from its October peak, officially entering a technical bear market.
Next week, investors will need to pay attention to trade negotiations between the US and other countries. If no agreements are established and more countries retaliate with tariff measures, the market could face a painful week.
Important event schedule for next week includes: Wednesday at 02:00, San Francisco Fed President Daly will participate in a dialogue about economic prospects and Fed work; Thursday at 20:30, US March CPI data will be released; Friday at 00:30, Philadelphia Fed President Harker will speak about Fintech. These data and statements could shape market sentiment in the coming period.
Despite current uncertainties, currency traders will focus on the US March CPI data, to be released on Thursday. Tariff increases not only threaten economic activity but also increase inflation risks. If CPI data rises faster than expected, this could cause traders to readjust their rate cut bets.
