Markets on Edge: Inflation Data, Fed Minutes, and Tariff Tensions in Focus

Updated on April 7 2025

As we enter the second week of April, financial markets are bracing for a flurry of economic events and policy shifts that could significantly sway investor sentiment. From escalating trade tensions to critical inflation reports and central bank insights, this week could set the tone for Q2 2025.

Tariff Tensions Escalate

The geopolitical spotlight remains firmly on U.S.-China trade dynamics. On Wednesday, the U.S. will begin implementing a new round of tariffs, with China responding swiftly with 34% retaliatory duties on Thursday. This development has reignited market volatility, triggering renewed recession fears among global investors.

Markets are now recalibrating expectations, not only around global growth but also on how these trade shifts might influence broader inflation and monetary policy outcomes.

U.S. Inflation Data in the Spotlight

All eyes will be on March’s Consumer Price Index (CPI) and Producer Price Index (PPI), expected this week. These readings follow February’s surprisingly soft CPI figures and will help determine whether that decline was an anomaly or the beginning of a disinflationary trend.

These inflation measures will also shape expectations around future Federal Reserve decisions, especially as the Fed continues to balance inflation control with maintaining growth momentum.

First-Quarter Earnings Kick Off

Major financial institutions—JPMorgan Chase, BlackRock, and Wells Fargo—are scheduled to release their Q1 earnings reports. Analysts are closely watching how banks have managed recent rate and policy shifts, as their performance can offer deeper insight into consumer credit, lending activity, and investor risk appetite.

Strong earnings could offer support to equities and stabilize financial sector confidence amid broader uncertainty.

Federal Reserve Minutes and Commentary

On Wednesday, the Federal Reserve will release minutes from its March policy meeting. Investors will comb through the details to understand the central bank’s inflation outlook, rate path considerations, and risk assessments. Additionally, scheduled speeches by key officials such as Austan Goolsbee and John Williams could further refine market expectations.

With rate cut probabilities pushed out to the fall by market consensus, any shift in tone will be closely scrutinized.

Other Key Indicators to Watch

Several important economic indicators will complement this week’s narrative:

• The Conference Board’s Consumer Confidence Index (Tuesday)

• Durable goods orders and weekly jobless claims (Thursday)

• Housing market data, including the Case-Shiller index and new home sales

• Consumer sentiment and small business optimism surveys

  
  

Together, these data points will help determine whether economic resilience is holding up amid inflation pressures and global uncertainty.