Fed Stays Put, Trump Touts UK Trade Deal, Bitcoin Booms Past $100K, Stagflation Fears Rise: This Week In Markets

Global markets digested a week packed with trade breakthroughs, monetary policy signals, and digital asset milestones.

Wall Street remains cautiously optimistic as the Trump administration intensifies efforts to strike favorable trade deals. Hopes were buoyed by a high-level summit between U.S. and Chinese officials in Switzerland over the upcoming weekend. Investors view the meeting as a step toward de-escalation.

Meanwhile, the Trump administration unveiled a trade agreement with the U.K. A 10% baseline tariff remains, but the U.S. intends to cut duties on U.K. car imports from 25% to 15%.

In return, the U.K. reduced tariffs on U.S. vehicles and slashed agricultural duties, bringing levies on American beef and other key exports near zero. In addition, British Airways placed a $13 billion order for Boeing Co. BA aircraft.

On the macro front, the Federal Reserve held its policy rate steady at 4.25%-4.50% for a third consecutive meeting, underscoring concerns over lingering inflationary pressures and labor market damage amid trade-related risks.

Fed Chair Jerome Powell struck a cautious tone and resisted expectations of imminent rate cuts, reiterating that monetary policy will remain data-dependent. Powell dismissed recession fears, attributing the weakness in first-quarter economic data to distortions in trade flows.

Still, a growing number of economists now warn that stagflation—a toxic mix of high inflation and stagnant growth—could be around the corner, straining the Fed's dual mandate.

Market pricing for rate cuts has shifted accordingly. As of now, futures imply just a 20% probability of a 25-basis-point cut in June.

In equities, The Walt Disney Company DIS reached the top of the mega-cap leaderboard. This follows robust earnings and a new theme park announcement for Abu Dhabi.

Eli Lilly & Co. LLY extended last week's decline following disappointing guidance, weighing heavily on the broader healthcare sector.

Cryptocurrencies staged a dramatic comeback. Bitcoin BTC/USD breached the $100,000 threshold. The top digital asset hit levels last seen in February as optimism around trade diplomacy lifted risk sentiment.

The rally was broad-based, with Ethereum ETH/USD jumping over 25% on the week following a major network upgrade.

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