Uncertainty looms as US economy rebounds in Q2 but new tariffs threaten trade relations

The US economy is expected to rebound in Q2, with a 1.7% increase in output despite a downward revision from initial estimates. However, uncertainty looms as President Trump announces new tariffs on major trade partners, potentially reigniting trade tensions.

China warns against cutting deals with the US to exclude them from global supply chains, as trade tensions remain unresolved. Investors are closely monitoring the situation and the potential impact on the fragile trade agreement between the two nations.

The Federal Reserve faces a tough decision on how to navigate tariff uncertainty and its impact on the economic outlook. With Fed funds futures predicting no rate change in July but a 64% chance of a cut in September, the market is waiting to see how tariff news will influence future policy decisions and economic stability.

Read more at Investing.com: Are Markets Underpricing the Next Tariff Shock?