Stocks Tumble As Trump Pushes New Tariffs On Mexico
In the midst of a seemingly endless trade dispute with China, President Trump has opened the trade war up on another front – Mexico. In an unexpected announcement, the president said he would raise tariffs 10% on July 1 if Mexico does not take sufficient action on migrants crossing the U.S. border.
Trump said the tariffs will continue to rise by 5% each month, up to as much as 25% in October if Trump doesn’t feel that Mexico has done enough to remedy the situation at the border.
On Friday, the S&P 500 fell by more than 36 points; the Dow by more than 355 and Nasdaq by more than 110, capping a downward trend.
Fed Watching Bond Market
The Federal Reserve is closely watching the market closely for signs that it should begin cutting interest rates.
The last rate hike occurred in December. The concern is over the inverted yield curve. In an inverted yield curve, rates on short-term debt overtake long-term debt rates.
This is not the first time this year that an inverted yield curve has reared its head. Continuing concerns over U.S.-China trade wars have disrupted the global economy, sending investors quaking to their relatively-safe bonds.
This shift in position picked up momentum Friday as Trump unveiled his plan for new tariffs on Mexico until he feels that Mexico has given the border situation proper attention.
It remains to be seen if the Fed will act on the stumbling markets or if they will wait until tighter financial conditions are imminent before taking action.
AdvisorNews Managing Editor Cassie Miller may be reached at cassie.miller@Adnewsfeedback.com. Cassie has an extensive background in magazine writing, editing and design. Follow her on Twitter @ANCassieM