U.S.-China Trade Talks Spark Market Optimism
Global markets rebounded as U.S.-China trade negotiations in Geneva showed signs of progress. U.S. Treasury Secretary Scott Bessent reported “substantial progress,” and both sides agreed to establish a consultative mechanism for continued economic negotiations. While no formal deal was reached, the talks signalled a potential de-escalation amid concerns about global supply chains. The Chinese side confirmed the positive meeting progress. Note: this is just the first step forward towards resolving the ridiculous tariffs.
FED: Wait and See.
At its May 6–7, 2025 meeting, the Federal Reserve’s Federal Open Market Committee (FOMC) decided to maintain the federal funds rate at 4.25% to 4.5%. This marks the third consecutive meeting where rates have remained unchanged, reflecting the Fed’s cautious approach amid economic uncertainties. Market reactions to the Fed’s decision were mixed. While some investors were reassured by the Fed’s commitment to data-driven policy, others expressed concerns about the potential for stagflation—a scenario characterised by high inflation and stagnant economic growth. Interestingly, Truflation is suggesting that inflation has fallen substantially.
Market Internals Repair Job: Work-in-Progress
Buyers are still winning for now as the good news continue to roll in, with the US-UK trade deal, resilient US labour market, and less negative outcome for US-China trade talks. Advance-Decline index continues to improve,
