Global markets have been reeling since the announcement of Trump’s tariffs on April 2nd, with a staggering $5 trillion evaporating from stock values worldwide. Economists everywhere are now deeply concerned that this ‘Liberation Day’ event could trigger a recession so severe it might “tank much of the economy across the globe.”

The market’s fierce reaction sent shockwaves, and on Friday, a clearly worried president took to his Truth Social platform to urge Federal Reserve Chairman Jerome Powell to slash interest rates, declaring it the “perfect time.” However, Powell is standing firm, anticipating that these aggressive tariffs will actually fuel inflation and slow down economic growth.

Powell’s point is that these tariffs are likely to cause a jump in prices initially. He worries this inflation could stick around, making it too early to adjust monetary policy before they see clearer signs of what’s really happening in the economy.

Some critics, including Trump himself, are suggesting Powell is being overly cautious and might miss the chance to make timely rate cuts. In that same Truth Social post, Trump didn’t hold back:

“He [Jerome Powell] is always ‘late,’ but he could now change his image, and quickly… CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”

But Powell is emphasizing that the Fed isn’t rushing into anything. They prefer to wait for more definitive economic signals before making any policy changes. This careful stance is all about his inflation concerns, a problem he expects to be made worse by these new tariffs.

So, even with Trump pushing hard for immediate action, Powell is keeping his eyes on the prize of stable inflation – a position that might leave investors hoping for quick rate cuts feeling disappointed.

As the markets tank, Bitcoin emerges as the hedge

With the global economy teetering on the edge, waiting to see if tariff talks, retaliations, or rate cuts will save the day, many investors are turning their attention to Bitcoin. It seems Bitcoin has broken free from its usual connection to the stock market and other risky global assets.

Friday saw the Dow Jones Industrial Average plunge by over 2,200 points, following a 1,679-point drop the day before – marking the worst two-day performance ever. The Nasdaq and S&P 500 also suffered their biggest falls since the COVID pandemic hit. Meanwhile, Bitcoin remained remarkably stable, hovering around $83k and even edging slightly higher as all this unfolded.

Rajat Soni, a Chartered Financial Analyst and expert in Bitcoin and finance, remarked:

“The S&P 500 has wiped out ALL of its gains since March 2024. In contrast, Bitcoin is up about 30% during the same period.”

Paolo Ardoino, CEO of Tether, put it simply and directly on social media, stating “Bitcoin is the hedge.”

Joe Burnett, Director of Market Research at crypto firm Unchained, suggested in a video post:

“Trump’s tariffs are here, U.S. stocks are crashing, and China is fighting back. Now might be a prime opportunity to build a significant bitcoin position. Not financial advice, of course.”

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