Global Markets Reel as Trump's Fed Decision Rattles Confidence
Emerging market assets fell amidst geopolitical strains, trade tensions, and Trump's dismissal of Fed Governor Lisa Cook. Hungary and Poland faced critical rate decisions, impacting currencies and equities. Geopolitical and economic concerns led to market dips, while Indian equities reacted to a U.S. tariff hike.
Most emerging market assets retreated on Tuesday after President Donald Trump fired a new salvo at the Federal Reserve, shaking investor sentiment ahead of critical rate decisions in Hungary and Poland. Trump's move has intensified concerns over the Fed's independence.
Hungary and Poland's central banks are grappling with complex trade-offs. Hungary prioritizes inflation control, while Poland is considering a gradual policy shift, potentially signaling a rate cut later this year. Both countries' currencies and stocks have dipped as a result of these macroeconomic pressures.
Meanwhile, a U.S. tariff hike on Indian goods hurt Indian equities, and geopolitical tensions further compounded economic challenges, causing EM currencies and global stocks to fall. Gold and other safe-haven assets rose as investors sought stability amidst global uncertainty.
(With inputs from agencies.)
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