Economist insights: US trade tariffs against China, accommodative monetary stance in Brazil and Russia and euro zone PMIs have dropped once again

›       The Trump administration has announced its intention to impose tariffs on goods imported from China, in order to defend itself against Beijing’s “economic aggression”. Few details have been given

›       China should favour a proportional approach, responding with trade measures comparable to the US actions

›       In Brazil and Russia, the central banks lowered their key rates by 25bp in a context of weak inflation.They have left open the option of future rate decreases

›       In the euro zone, PMIs dropped again in March, which tends to confirm a slowdown in growth in GDP in 2018, as we expected 

Focus Fed: A slightly more hawkish stance that should allow it to keep a handle on long-term yields (p.4)

›       The first monetary policy meeting with Jerome Powell as Chairman confirmed the continuity of the monetary policy direction and gradual path of rate hikes

›       The FOMC members revised their growth forecasts upward and anticipate a slightly greater increase than previously in the fed funds rate in 2019 and 2020

›       According to our analysis, this slightly more hawkish communication should enable the Fed to contain inflation anticipations despite the acceleration in nominal growth