While You Were Sleeping: 5 stories you might have missed, April 5, 2025
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The US faces a highly uncertain outlook with elevated risk of inflation, says Federal Reserve chairman Jerome Powell.
PHOTO: BLOOMBERG
‘Larger-than-expected’ tariffs spur higher inflation, slower growth: US Fed chief Jerome Powell
President Donald Trump’s new tariffs are “larger than expected” and the economic fallout including higher inflation and slower growth likely will be as well, Federal Reserve Chair Jerome Powell said on April 4 in remarks that pointed to the potentially difficult set of decisions ahead for the central bank.
“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” undermining both of the Fed’s mandates of 2 per cent inflation and maximum employment, Mr Powell told a business journalists’ conference in Arlington, Virginia, remarks that pointed to difficult decisions ahead for the US central bank and did nothing to staunch a global bloodletting in stock markets.
Mr Powell spoke as equity markets from Tokyo to London to New York continued a swoon that has wiped some 10 per cent off major US stock indexes since Mr Trump announced a raft of new tariffs on trading partners around the world on April 2.
Investors had looked to Mr Powell’s speech for reassurance that perhaps the Fed was poised to take supportive actions as it has in previous moments of extreme market duress, and Mr Trump himself took to his social media platform to say now would be the “perfect time” for the Fed to cut interest rates.
Trump tariff tailspin worsens, Nasdaq tumbles 5.8% into bear market
Wall Street nosedived for a second straight day on April 4, confirming the Nasdaq Composite was in a bear market and the Dow Jones Industrial Average was in a correction, as an escalating global trade war spurred the biggest losses since the pandemic.
The Dow Jones Industrial Average, S&P 500 and the Nasdaq Composite posted their largest two-day declines since the emerging coronavirus caused global panic during U.S. President Donald Trump’s first term. For April 3 and April 4, the Dow was down 9.3 per cent, the S&P 500 10.5 per cent and the Nasdaq 11.4 per cent.
Fallout from Mr Trump’s sweeping tariffs stoked fears of a global recession, wiping trillions of dollars of value from US companies. Highlighting growing panic among investors, the CBOE Volatility Index, or Wall Street’s fear gauge, closed at its highest level since April 2020.
China hits back at US tariffs with export controls on key rare earths
PHOTO: REUTERS
China placed export restrictions on rare earth elements on April 4 as part of its sweeping response to US President Donald Trump’s tariffs, squeezing supply to the West of minerals used to make weapons, electronics and a range of consumer goods.
The move, which Beijing had long hinted was possible, further ratchets up trade tensions between the world’s two largest economies and leaves American manufacturers scrambling for fresh supplies of the critical minerals they have relied upon for decades.
China produces around 90 per cent of the world’s rare earths, a group of 17 elements used across the defense, electric vehicle, energy and electronics industries. The United States has only one rare earths mine and most of its supply comes from China.
Rubio says US ‘testing’ whether Russia is serious about peace in Ukraine
via REUTERS
The United States will know in a matter of weeks if Russia is serious about peace with Ukraine, US Secretary of State Marco Rubio said on April 4, after European allies accused Moscow of stalling over the Trump administration’s call for a ceasefire.
“We will know soon enough, in a matter of weeks, not months, whether Russia is serious about peace or not. I hope they are,” Mr Rubio said at the end of a two-day Nato meeting.
“If this is dragging things out, President Trump’s not going to fall into the trap of endless negotiations about negotiations,” he added.
Britain’s Prince Andrew sent China’s Xi birthday letter every year, court documents show
PHOTO: REUTERS
Britain’s Prince Andrew sent Chinese President Xi Jinping a letter on his birthday every year as part of a “communication channel” to support the British royal’s platform for entrepreneurs, according to court documents published on April 4.
The documents came to light following a legal challenge brought by Chinese businessman Yang Tengbo, who was described as a “close confidant” of Prince Andrew and was banned from Britain on the grounds he was a suspected Chinese spy.
Mr Yang, who has said that “the widespread description of me as a ‘spy’ is entirely untrue”, is appealing against the rejection of his challenge to the decision to ban him from the country.
