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Stuck in the middle
- Despite warnings that the impact of the US tariffs would hit the UK economy the hardest the Fed sat on its hands this week using the cover of uncertainty on the outlook to continue it near six-month pause on interest rates
- Fed chair Powell delivered another rhetorical masterclass in hedging his bets on the future rate moves, nothing the risks to both higher unemployment and inflation have risen potentially increasing tension on the fed's dual mandate of maximum employment and stable prices.
- In that context the US administration is engaging in trade negotiations with key partners.
- Overall the UK deal suggests the US tariffs are unlikely to return to the January 2025 baseline in the trade agreement expected to be finalized in the coming months
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