Over the weekend, fresh headlines hinted that President Donald Trump’s much-discussed reciprocal tariffs, slated for April 2, might not be the broad, blunt instrument markets initially feared. Instead, they could be more targeted, potentially easing some of the anxiety that’s kept investors on edge. But let’s not kid ourselves—the situation remains fluid, and a major risk still looms large. Markets hate uncertainty, and this story is far from written.
Last week offered a glimpse into how these dynamics are playing out. The Federal Open Market Committee’s (FOMC) latest dot plot stuck to its script, signalling expectations of two rate cuts this year despite a bump in near-term inflation projections from 2.5 per cent to 2.8 per cent.
That’s a notable shift—it suggests the Fed sees price pressures sticking around a bit longer than anticipated. Meanwhile, the median growth forecast took a hit, sliding from 2.1 per cent to 1.7 per cent, a clear nod to the mounting headwinds facing the US economy.
Friday’s market action encapsulated the mood: equities spent most of the day in the red, only to be yanked into positive territory by a late rally from mega-cap tech giants, nudging the S&P 500 up 0.1 per cent by the close. It’s a classic case of the market’s bipolar nature—pessimism giving way to a flicker of optimism driven by a handful of heavyweights.
The bond market, meanwhile, told its own story. The US Treasury yield curve steepened, with long-end yields creeping higher after Fed Governor Christopher Waller suggested the banking system still has plenty of reserves to handle the Fed’s ongoing Treasury runoff without disruption. The 10-year yield edged up 0.9 basis points to 4.246 per cent, reflecting confidence in the longer-term outlook.
At the front end, however, yields dipped—the 2-year yield fell 1.6 basis points to 3.948 per cent—as markets priced in more Fed easing to come. It’s a delicate balancing act: the Fed resisting short-term pressure to pivot aggressively while signalling it’s not blind to the softening growth picture.
The US Dollar Index, up 0.2 per cent to 104.09, notched its first weekly gain in three weeks, a subtle flex of muscle amid the uncertainty. Commodities offered a mixed bag: gold, often a safe-haven darling, shed 0.7 per cent as profit-taking kicked in, while Brent crude eked out a 0.2 per cent gain, buoyed perhaps by geopolitical jitters or steady demand signals.
Over in Asia, the MSCI Asia ex-Japan index dropped 0.9 per cent on Friday—its third straight day of losses—dragged down by tariff fears, though it still managed a 1.22 per cent weekly gain. Chinese tech stocks weren’t so lucky; profit-taking hammered the Hang Seng and CSI 300, which slumped 2.19 per cent and 1.52 per cent, respectively, as investors cashed out amid the overhang of potential trade disruptions.
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Looking ahead, this week’s economic calendar is packed with potential market movers. Friday’s US Personal Consumption Expenditures (PCE) data—the Fed’s preferred inflation gauge—will be the headliner, offering fresh clues on whether those upwardly revised inflation projections hold water.
Earlier in the week, the UK’s February CPI on Tuesday and Tokyo’s March CPI on Friday will shed light on global price trends. Stateside, the Congressional Budget Office’s debt ceiling estimate on Wednesday could stir the pot, especially with the Treasury’s cash pile under scrutiny.
And let’s not forget the steady drumbeat of Fedspeak—comments from Fed officials could either soothe or spook markets, depending on their tone.
Asia’s in the spotlight too. The China Development Forum, which kicked off in Beijing on Sunday and wraps up today, Monday, March 24, has drawn global business leaders eager to gauge China’s next moves. Some are slated to meet President Xi Jinping later this week, a rare chance to take the pulse of China’s leadership amid trade tensions. Early trading in Asian equities today has been a mixed bag, reflecting the push and pull of optimism over narrower tariffs and lingering unease about what’s next.
Then there’s the crypto angle, which has been lighting up financial headlines. Bitcoin, XRP, and Solana (SOL) kicked off Monday with gains, riding a wave of positivity tied to those reports of more targeted Trump tariffs. Bitcoin’s hovering around US$86,500, up 2.7 per cent in the last 24 hours, while SOL’s outpacing the pack with a near six per cent jump to US$138. The S&P 500 futures are cheering, too, pointing to a higher open for US stocks.
It’s tempting to see this as a sign that Bitcoin may have found a floor, with some analysts eyeing a rebound toward US$90,000 if tariff fears continue to ease and the Fed holds steady. Trump’s signalling of a lighter touch on trade and the Fed’s resistance to knee-jerk rate cuts last week seems to have injected a dose of cautious optimism into the crypto space.
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Michael Saylor’s MicroStrategy is another piece of this puzzle. The company’s CEO has been dropping hints via his “Saylor Bitcoin Tracker” posts on X, a reliable signal that more Bitcoin buys are coming. Sure enough, the word is that MicroStrategy might announce a massive purchase—potentially 500,000 BTC, worth billions—tomorrow morning.
Saylor’s strategy of scooping up Bitcoin during dips has turned MicroStrategy into a crypto behemoth, with its holdings currently valued at US$8.73 billion, down from a peak of US$19.50 billion. It’s a bold bet on Bitcoin’s long-term value, and if this rumoured US$21 billion acquisition pans out, it could light a fire under the market just as sentiment starts to thaw.
Fidelity Investments is making waves too, stepping into blockchain tokenisation with a filing to register a tokenised version of its US dollar money market fund on the Ethereum network. Submitted last Thursday to the SEC, the plan involves a new “OnChain” share class for its US$80 million Fidelity Treasury Digital Fund, mostly made up of US Treasury bills.
It’s a move that echoes efforts by BlackRock and Franklin Templeton, signalling that traditional finance is increasingly cozying up to blockchain’s promise of transparency and efficiency. If approved, it could mark a turning point for how institutional money flows into digital assets.
Ethereum itself is a bit of a paradox right now. The price has been sliding—down over 51 per cent from its December peak of US$4,100 to around US$2,000—yet so-called “Ethereum whales” are quietly stacking their bags. Glassnode data shows wallets holding at least US$100,000 worth of ETH jumped from 70,000 on March 10 to over 75,000 by March 22, a stark contrast to the 146,000 seen when ETH was flying high in December. Analysts are eyeing a potential breakout to US$2,200 if buying pressure builds, but for now, ETH’s stuck in a rut, caught between whale accumulation and broader market malaise.
The prospect of more targeted tariffs is a lifeline for markets desperate for clarity, but the risks haven’t vanished—they’ve just shifted shape. The Fed’s juggling act—balancing inflation worries with growth concerns—keeps everyone guessing, and this week’s data could tip the scales either way.
Crypto’s riding a wave of cautious hope, bolstered by big players like Saylor and Fidelity, but it’s tethered to the same macro uncertainties as equities and bonds. Asia’s fate hinges on how China navigates this tariff tightrope, and the US debt ceiling looms as a wildcard. It’s a high-stakes game, and while the pieces are moving, the board’s still a mess.
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