More headwinds for investors?
A year ago, around 'Liberation Day', one word was enough to make markets nervous: trade tariffs. Today, that word crops up again. This time, Trump is threatening again. Sometimes even with an extra 50%. Is this another headline? Or could this become real policy, with even more headwinds for investors? Mark Van Assche, account manager Private Banking and Wealth Office, talks about it with Mailee Hovsepian, customer relationship manager at KBC Asset Management.
30/04/2026
How are investors reacting?
Inflation fears weigh on bond prices. Strong results season in the US.
- The wars in Ukraine and Iran are driving up the price of fossil energy. This energy crisis is starting to seep into inflationary expectations, resulting in a sharp increase in long-term interest rates, as well. On the flip side, bond prices have fallen due to the fact that, when market interest rates rise, investors offer a lower price for current bonds.
- The earnings season was strong in the US, whereas earnings growth was lower in Europe.
- The war with Iran has caused volatility on the stock markets in recent weeks, but overall, the reaction has been better than expected. The hope is that positive (but slightly slower) growth can soon resume, with substantial investment in AI fuelling earnings growth.
What happened in the world?
Risks remain despite hopes for a quick end to the conflict in Iran
- Although a temporary ceasefire has been declared, the war with Iran continues to pose a significant risk to the global economy if energy supplies remain disrupted for a longer period of time.
- The rising price of crude oil means that slower growth is expected for both the US and European economies. Crude oil prices are linked to the latest news relating to the conflict.
- In the US, the ‘Big Beautiful Bill’ should provide a limited boost to growth. In the euro area, the investments announced for defence and infrastructure are gradually taking more concrete shape. China continues to regularly support its flagging economy.
- The ECB and the Fed kept their key rates steady at their last meetings and their future decisions will depend on economic news. With inflation rising in recent weeks, the financial markets believe that key rates are likely to be increased. In the US, factory gate prices came in higher than expected.
- In recent months, concerns have surfaced about private loans from lenders other than the traditional banks. While this does weigh on sentiment, larger banks should not be too severely impacted.
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