U.S. economy weak, political pressure on Fed, global trade tensions ease slightly

From Investing.com: 2025-05-07 09:20:00

The U.S. economy shows signs of weakness with negative Q1 GDP, declining job openings, and mixed manufacturing data, while political pressure on the Fed adds to market uncertainty. In the Eurozone, inflation rises and GDP surprises on the upside, with ongoing but fragile trade negotiations with the U.S. Canada’s economy contracts in February, with industrial sectors leading the decline, raising recession risks. Global trade tensions ease slightly as China offers tariff exemptions and Europe pursues negotiations, but geopolitical risks around Iran and Ukraine remain. ABCG Research maintains a bearish view on the U.S. dollar, bullish bias on EUR/USD, and forecasts a weakening CAD index.

The past week saw a modest pickup in market activity with investors cautious ahead of major interest rate decisions. The U.S. economy faces rising uncertainty and cautious optimism, with job openings falling and GDP contracting in Q1. President Trump’s comments on the Fed added to market concerns. China offers tariff exemptions on select U.S. goods to ease trade tensions, while Trump’s nuclear talks with Iran increase geopolitical risks. ABCG Research maintains a bearish view on the dollar amid political pressure on the Fed and softening economic data.



Read more at Investing.com: Fed in Tight Spot as Trump Pressures Powell and Recession Risks Mount