The Federal Reserve is the most powerful central bank in the world. It manages the dollar, anchors global interest rates, and plays a central role in financial stability. 

Its independence from political pressure has been treated as non-negotiable since its creation.

But now that independence is being tested. President Donald Trump is said to be looking at options to fire Fed Chair Jerome Powell. 

If Trump follows through, the fallout won’t be limited to the US. It could trigger a chain reaction across global markets, currencies, credit systems, and trade flows.

Is firing the Fed chair even possible?

Legally, Powell can only be removed “for cause,” not for policy disagreements. But that barrier is being challenged. 

Trump’s legal team is testing a Supreme Court case involving other independent agencies.

If the Court weakens or overturns the 1935 Humphrey’s Executor precedent, Trump could gain the authority to remove Powell without cause.

Read more: Trump’s war with the Federal Reserve: inside the legal fight to fire Jerome Powell

Trump has called Powell “too late and wrong” for not cutting interest rates faster, and says he has the power to remove him “real fast.” 

White House advisers are studying whether a firing is feasible under new legal interpretations.

If the Court gives the green light, Powell’s removal could become a reality. And that would come at a big cost.

What happens to the Fed if Powell goes?

Powell is not a one-man central bank. He chairs a 12-member committee that sets monetary policy.

But removing him would likely trigger a wave of resignations. 

That gives Trump the chance to install loyalists, turning the Fed into a political instrument.

The immediate cost would be the collapse of central bank independence.

Investors would no longer trust the Fed to fight inflation or manage the money supply based on economic data. 

The central bank would become part of the executive branch. The result will be a loss of credibility that could take decades to repair.

A prime example is Türkiye, where President Erdoğan removed central bank leaders who resisted rate cuts. 

The result was inflation over 70%, a currency in freefall, and capital exit. 

Of course, the US has more built-in protections, but the direction of travel would be the same.

What would markets do?

The bond market would be the first to react. Investors would assume any replacement for Powell would follow Trump’s push for lower rates, even with inflation not having reached the 2% target yet.

That implies more government borrowing financed by quantitative easing.

Treasury yields would spike as investors dump bonds. Bond prices would fall, creating massive paper losses for banks, pension funds, and insurers.

Liquidity could dry up quickly. Treasuries are used as collateral in financial markets.

If their value drops, institutions would have to deleverage. That could create a credit crunch that could spread globally.

The stock market would likely suffer an initial shock. For reference, the US stock market makes up around 60% of the global stock market. 

A sharp selloff could hit the S&P 500, triggering circuit breakers as seen in past crisis moments. 

There might be a brief rally if a new Fed chair cuts rates, but that wouldn’t last. Rising yields, inflation, and fear of a policy-driven Fed would push equities into more volatile territory.

What happens to the dollar?

In the short term, the dollar might spike. Forced liquidations and margin calls can boost dollar demand temporarily. But longer term, the picture darkens.

The dollar’s strength depends on trust. If investors believe US monetary policy is no longer guided by long-term stability, that trust fades.

Inflation expectations would become unanchored. If markets believe the Fed won’t raise rates to contain rising prices, inflation becomes self-fulfilling. 

The result would be a weaker dollar, rising import prices, and falling real wages.

The dollar is the world’s reserve currency. If it loses that status, it will affect every single economy.

Countries and corporations would start shifting away from dollars in favor of euros, yuan, or commodity-backed assets. De-dollarization would certainly accelerate.

How would this affect the real economy?

The housing market could experience a confusing split. If the Fed cuts rates under political pressure, mortgage rates might drop, giving wealthier buyers a temporary window. 

But rising inflation would offset that benefit. For most people, higher prices, tighter lending standards, and market instability would cancel out any gains. Homeownership would become harder, not easier.

Credit markets would tighten. Treasury yields are used to price everything from car loans to corporate debt.

If those yields are no longer seen as dependable, risk premiums rise.

Companies would face higher borrowing costs. Small businesses that are already sensitive to credit conditions would be hit first.

Foreign direct investment would slow or stop. Multinationals can’t make long-term plans in a country where monetary policy is unpredictable and politicized. 

Finally, global trade flows would alter completely while capital is moving to safer jurisdictions.

Could this break the system?

The Fed’s institutional credibility is one of the last guardrails in the US economic system.

Firing Powell would send a message that even this guardrail is now subject to politics.

Investors and policymakers would begin pricing in “political risk” to US assets, something typically reserved for emerging markets. 

Risk models would be updated. Institutions might begin to consider capital controls or political interference as part of their US exposure.

G7 nations might consider coordinating a response to stabilize global markets if the dollar falters. Some are already discussing alternatives to the current reserve currency system. 

Discussions about having a mixed basket of currencies or special drawing rights (SDRs) are already escalating.

What’s the long-term consequence?

Removing Powell wouldn’t just be about replacing one central banker. It would completely alter how the Federal Reserve operates and what role it plays in the economy. 

If it becomes a tool of the White House, markets will adapt. But perhaps not in a way that benefits the US.

Once trust is lost, it cannot be easily regained.

The US would go from being the most stable economic power to being treated more like a high-risk borrower. 

Inflation would be harder to control. Capital would be harder to attract. Economic growth would become more volatile.

If Powell is fired, the immediate market reaction may be sharp, but the real danger is long-term.

Investors, institutions, and foreign governments would see it not just as a change in personnel but as a change in regime. 

The Federal Reserve would no longer be seen as an anchor for global finance. It would be seen as a tool of politics.

And that would mark the end of an era.

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Pope Francis, the Argentine Jesuit who became the first Roman Catholic pontiff from the Americas, has died, the Vatican announced Monday.

He was 88.

The news was delivered in a video address by Cardinal Kevin Farrell.

“Dearest brothers and sisters, with deep sorrow I must announce the death of our Holy Father Francis,” Farrell said, according to an official translation.

“At 7:35 this morning, the Bishop of Rome, Francis, returned to the house of the Father. His entire life was dedicated to the service of the Lord and of His Church. He taught us to live the values of the Gospel with faithfulness, courage, and universal love, especially in favor of the poorest and the marginalized.”

“With immense gratitude for his example as a true disciple of the Lord Jesus, we commend the soul of Pope Francis to the infinite merciful love of the Triune God,” Farrell added.

Elected the 266th pope of the Roman Catholic Church following the resignation of Benedict XVI in 2013, Francis was born Jorge Mario Bergoglio in Buenos Aires on December 17, 1936.

While Benedict was viewed as a staunch defender of orthodox doctrine, more at ease with books than with crowds, Francis emerged as a pope who frequently smiled, embraced humility, and carried a broad message.

His emphasis on poverty and human suffering resonated with many liberal non-Catholics, and he labeled climate change as a moral issue that needed urgent attention.

Rejecting the privileges associated with his role, he opted for the Vatican guest house over the lavish papal apartments.

He was the first Jesuit pope, the first from the Southern Hemisphere, and the first pontiff from outside Europe in nearly 1,300 years, following Pope Gregory III of Syria in 731.

The son of an Italian immigrant father and an Italian Argentine mother, Francis was the eldest of five children.

As a young man, he worked as a janitor and nightclub bouncer before training as a chemical technician.

He was ordained as a Jesuit priest in 1969 and, by 1973 at age 36, had become head of the Society of Jesus in Argentina and Uruguay — a post he held until 1979.

Pope John Paul II appointed him a bishop in 1992, and six years later, Francis was named archbishop of Buenos Aires. He was elevated to cardinal in 2001.

Francis underwent surgery in his youth to remove part of a lung following a pulmonary illness, though the Vatican said in 2013 that the condition had never impaired his work.

In his later years, the pontiff faced ongoing health challenges, including respiratory ailments and several surgeries.

He was hospitalized for the first time as pope in July 2021, undergoing colon surgery at Rome’s Gemelli hospital for diverticular stenosis — a development that shook the church despite the Vatican’s assurances that the procedure had been scheduled.

He was admitted again in March 2023 with bronchitis, joking to reporters afterward that he was “still alive.”

Just over two months later, he underwent another operation to repair a hernia.

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What used to be an independent body, the Federal Reserve, is now part of the political discussions under the Trump administration.

President Donald Trump has escalated his attacks on Fed Chair Jerome Powell, claiming his termination “cannot come fast enough.” But this isn’t just about interest rates. 

Trump is pushing to reshape the structure of US government institutions, starting with the Federal Reserve. 

But is that even legal? A Supreme Court case already in motion may give him the legal authority he needs.

How did it come to this?

Trump’s public feud with Jerome Powell began years ago during his first term. Though Trump appointed Powell as chair in 2018, their relationship soured almost immediately. 

Back then, Trump wanted low interest rates to boost the stock market. Powell, on the other hand, raised interest rates, citing inflation concerns. 

Throughout 2019 and into the pandemic year of 2020, Trump repeatedly lashed out.

He called Powell “the enemy” and suggested firing him. He even asked White House lawyers to explore legal options for his removal. 

But Powell has always held firm, insisting the Fed must remain independent and data-driven.

Fast forward to 2025, and the feud has reignited. Powell warned recently that Trump’s aggressive tariffs would raise inflation and slow growth. 

Trump responded with renewed threats, accusing Powell of “playing politics” and saying his termination “cannot come fast enough.” 

What’s at stake legally?

At the center of the legal fight is a 1935 Supreme Court ruling known as Humphrey’s Executor.

This case set the lasting precedent that presidents cannot remove officials at independent regulatory agencies without just cause.

The goal was to protect agencies like the Fed from political interference.

But Trump wants that precedent overturned. His administration argues that it infringes on presidential authority under the Constitution. 

According to Solicitor General D. John Sauer, the president should not have to delegate executive power to officials who oppose his agenda.

The legal argument gained traction in 2020 when the Supreme Court ruled 5–4 that the president could fire the head of the Consumer Financial Protection Bureau. 

But that case dealt with a single-director agency. The Fed, which operates under a seven-member board, has so far remained out of reach.

Now, Trump is using a different case. This one involves federal labor boards in order to bring the issue back to the Court.

And this time, the implications are much broader.

Is this Supreme Court case really about the Fed?

The case before the Court involves Trump’s firing of two officials from the National Labor Relations Board and the Merit Systems Protection Board. 

While it may seem unrelated, the outcome could affect how all independent agencies are governed, including the Federal Reserve.

Trump’s lawyers insist the Fed is different. They point to its unique funding, history, and structure. 

In past rulings, the Court has acknowledged that the Fed is “in a different league.”

Still, critics argue that if the Court weakens or overturns Humphrey’s Executor, it opens the door to removing Powell too.

Powell, for his part, has said he does not believe the case will apply to the Fed.

But former NLRB Chair Gwynne Wilcox, one of the dismissed officials, warned the Court that a ruling in Trump’s favor could jeopardize the Fed’s independence and shake investor confidence.

Why the Fed remains a special case

Unlike most agencies, the Federal Reserve is protected by multiple layers of legal and structural insulation. 

Its governors can only be removed “for cause,” and the institution funds itself rather than relying on Congress.

These features were designed to protect monetary policy from political interference.

The Fed also serves a dual mandate: price stability and maximum employment.

Powell and his team have kept rates steady in recent months, waiting for more clarity on how tariffs might affect inflation and growth. 

Trump sees this pause as obstruction.

Still, the Supreme Court has never directly ruled on whether the president can fire a sitting Fed chair.

And while current precedent leans in Powell’s favor, a change in legal interpretation could change everything.

What is Trump’s inner circle saying?

There is some disagreement within Trump’s own team.

Treasury Secretary Scott Bessent has warned that weakening the Fed’s independence could harm financial markets and investor trust. He called monetary policy “a jewel box that must be preserved.”

On the other hand, economic adviser Kevin Hassett has softened his earlier position. In 2021, he said firing Powell would damage the Fed’s credibility.

But now, he says the president’s team is “studying” whether it can be done legally. He cited “new legal analysis” but didn’t provide specifics.

The calculations from Trump’s team are clear: He wants more control, but he also knows that markets could panic if the Fed appears politicized.

Why it matters and what comes next

This isn’t just about Powell or interest rates. It’s about whether presidents can exert direct control over institutions built to be independent. 

If Trump succeeds in getting the Supreme Court to weaken Humphrey’s Executor, it would set a legal precedent that could outlast his presidency.

The current feud, which is all public for everyone to see, is just the tip of the iceberg.

Whatever the outcome, it will certainly have extraordinary implications in legal, political, economic, and institutional domains.

Some say that Trump is attempting the most aggressive executive power expansion since FDR. 

The Supreme Court is expected to rule on the labor board case soon. 

For now, Powell remains in his role until the end of his term in 2026. 

But if the Court grants Trump firing powers, the fight for control of the Federal Reserve will escalate.

If the Court hesitates to touch the Fed, Trump may still pursue alternative legal interpretations, stacking the Fed with loyalists, or aim to reshape its structure via executive orders and appointments.

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As luxury companies navigate the choppy waters of a global economic slowdown, France’s Hermès has once again found stability in its most iconic creations—the Birkin and the Kelly handbags.

The company reported a 7% rise in sales for the first quarter of 2025, narrowly missing analysts’ expectations, yet confirming its status as one of the sector’s most resilient players.

While rivals wrestle with shrinking demand and pricing pressures, Hermès’ timeless strategy and unwavering appeal to ultra-wealthy clientele have helped it stay the course, even as uncertainty looms over tariffs and China’s property-linked slowdown.

Birkin and Kelly bags drive store traffic and cross-category sales

The Birkin bag—named after British actress Jane Birkin—and the Kelly—immortalized by Grace Kelly—have long been regarded as the crown jewels of the Hermès portfolio.

Their reputation as status symbols has only deepened in recent years, with collectors willing to spend tens of thousands of dollars and wait months, or even years, to acquire them.

In a downturn, they do more than just sell well.

They function as anchor products, pulling customers into the store and encouraging purchases in other categories, including scarves, jewellery, and ready-to-wear.

Known in luxury circles as “pre-spend,” shoppers often build a purchasing history with the brand through smaller-ticket items, such as $270 silk ties or $40,000 bracelets, in hopes of eventually being offered a Birkin.

This strategy remains highly effective.

Even as demand in Mainland China showed signs of strain in the first quarter, Hermès posted growth across all regions, including the Americas, where low stock levels in early 2025 were offset by strong March sales.

Management noted that trends have remained positive through early April.

China’s slowdown and tariff threats fail to shake investor confidence

Hermès’ performance in China—a region facing ongoing consumer caution—was notably subdued.

Yet it stood out relative to competitors, many of whom have seen significant slowdowns across Asia.

In the US, where tariffs on European goods are set to increase by 10% beginning May 1 under the Trump administration, Hermès remains confident.

Management believes it can pass those costs on to American consumers—an assertion few other luxury houses can make with such confidence.

That confidence stems from the brand’s unparalleled pricing power.

In a note last week, Jefferies analysts reiterated that Hermès is well-positioned to outperform its peers, describing the company as a “safe haven” amid ongoing turbulence in the luxury sector.

The analysts maintained a “relative preference” for Hermès due to its elite customer base and consistent demand patterns.

Made to last: low production, high margins

A key element of Hermès’ resilience lies in its ultra-controlled production model.

The brand makes no more than 70,000 Birkin bags per year, each handcrafted by a single artisan over 18 to 24 hours.

Kelly bags take a similarly meticulous approach, often requiring 14 to 20 hours of work by a single leatherworker.

This artisanal method, combined with limited availability and no discounting—even during recessions—has helped Hermès maintain some of the highest margins in the luxury industry.

While rivals like Kering have occasionally relied on markdowns to clear stock, Hermès has never discounted its handbags, reinforcing their status as investment-grade fashion items.

The brand’s careful control over supply not only maintains exclusivity but also drives resale value.

Collectors treat the bags like fine art or rare watches, with many appreciating in value over time.

Even secondhand, a Birkin can command a premium of 30–50% over its original retail price, especially in hard-to-find colours or materials.

Wealthy clientele insulates brand from macro shocks

Unlike mass-luxury players, Hermès caters to the global elite.

According to Bain & Co., the top 2% of luxury buyers account for over 40% of sector spending, and Hermès is disproportionately exposed to this tier.

These consumers are relatively insulated from rising interest rates or cost-of-living concerns, meaning their discretionary spending patterns hold firmer when the economy turns sour.

That dynamic was evident in Hermès’ full-year 2024 results, which showed a 17% rise in sales at constant exchange rates—far outpacing the industry.

Even in the US, where demand softened after February due to tariff speculation, Hermès saw signs of recovery in March.

The quiet giant of luxury continues to outperform

While conglomerates such as LVMH pursue high-profile acquisitions and expand into new categories, Hermès remains focused on its narrow but highly profitable core.

It avoids celebrity marketing campaigns and seasonal fashion fads, instead relying on artisanship, scarcity, and heritage to attract customers.

This unwavering consistency has not gone unnoticed by investors.

Hermès now trades at nearly 45 times forward earnings—more than double the average for luxury peers—and recently surpassed a market capitalization of €220 billion, making it Europe’s second most valuable company after LVMH.

Though it may have missed the mark by a hair in Q1, Hermès remains the industry’s north star—luxury at its purest, and most enduring.

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A fortnight ago, investors were counting down the hours to President Trump’s announcement of ‘reciprocal tariffs’. Global stock indices, led by the US majors, were already exhibiting evidence of investor concern.

The Dow and the Russell 2000 (a less popular stock index, but an important indicator of the mood towards US mid-cap, domestically-focused corporations) had both peaked in November.

The S&P 500 and NASDAQ, which both contain a significant weighting towards the tech giants, hit their all-time highs in mid-February. 

Since then, all the US majors sold off, taking them back below levels last seen just after Trump’s election victory on 5th November. They had a mild recovery in the latter half of March.

But it was evident that investors were becoming wary. The feeling was that tariffs could go either way. President Trump could announce a modest baseline tariff on those countries he believed were acting ‘unfairly’.

Or he could do something worse. In the end, he did something much, much worse. 

Most tariffs went through a fairly rapid ‘process’ of being postponed, altered and retargeted. But given what has happened since, it looks as if the 10% baseline tariff across exports from the US’s trading partners is much more in line with what the markets were hoping for.

Although in the absence of a string of successful country-by-country negotiations, these could revert to the original reciprocal rates in three months’ time. 

But one thing now looks certain, and that is that the Trump administration’s real target in all this brouhaha is China.

Add in the bellicose rhetoric and thin skins on both sides, and the tariff tiff has morphed into an all-out trade war. Investors are now trying to work out if this can be resolved, and if so, how long it could take.

Analysts have all come up with opposing theories over which side stands to be worst affected, and who is most likely to blink first. One argument goes that President Trump’s readiness to water down most tariffs is a sign of weakness. Maybe.

Although the fact that he ramped up China’s levies to 145% suggests not. It’s also said that China’s authoritarian regime is in a better position to accept hardships on its citizens in a way that Trump can’t.

But China’s economy is in a poor state, no matter what the data says, and its property implosion means that it can’t rely on its domestic market to replace its export market. 

On the other hand, it looks as if the Trump administration may have panicked when US Treasuries went into meltdown. It could accept a sell-off in equities, but not a threat to the world’s ultimate safe-haven asset.

The yield on the 30-year yield had its biggest weekly jump since the 1980s, even as the US dollar was in freefall. It looked as if something had burst. 

Was China to blame? It seems unlikely that they were wholly responsible for the bond market sell-off. It would largely be self-defeating given how much US government debt they own.

Also, such a move would push up the value of the yuan, which would only make life more difficult for Chinese exporters.

It seems more likely that the dislocation between the dollar and US Treasuries was largely due to massive deleveraging by hedge funds and the shadow banking system. 

Markets were a touch calmer in the week leading up to Easter. But it doesn’t feel like the crisis has peaked yet.

The egos involved are just too big, and the stakes far too high. At some stage, this will be resolved. But risk markets look likely to suffer a lot more pain before things get back on a more even keel.  

(David Morrison is a Senior Market Analyst at Trade Nation. Views are his own.)

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Globalization has long been regarded as an unstoppable wave in the world of international trade and cooperation, promoting economic growth and cultural exchanges all over the world.

However, in recent years, several obstacles have emerged that threaten to undercut decades of development.

According to a Statista report, the revival of nationalism and the protectionist measures are some of the factors altering the global trading landscape, prompting many to wonder if we have passed the apex of globalisation.

A terminal decline: the impact of the pandemic

The course of global trade has been anything but linear.

Following decades of stable expansion, the 2008 financial crisis exposed flaws in the system.

However, it was the COVID-19 outbreak that served as a watershed moment, plunging world trade to levels not seen since 2003.

The World Bank observed a significant drop in the trade-to-GDP ratio, highlighting the vulnerability of global supply networks that rely significantly on international collaboration.

A short-lived resurgence?

Despite the depressing circumstances, global trade showed a remarkable recovery following the pandemic.

By 2022, the trade-to-GDP ratio had risen to an astonishing 62.8%, indicating a recovery and return to pre-pandemic levels of activity.

However, this quick recovery was not without hurdles. In 2023, the percentage fell again to 58.5 per cent, indicating potential volatility in the global trading framework.

While some industries swiftly adapted to new rules, others struggled with ongoing supply chain disruptions and shifting demand.

Companies and governments alike recognised the importance of assessing and redesigning their supply chains to avoid the dangers associated with global dependencies.

The timetable for such changes is unknown as businesses navigate complex trade conditions and uncertain future regulations.

Nationalism and protectionism: emerging threats

As globalisation seeks to regain its foothold, the resurgence of nationalism poses considerable problems.

Politics in several regions have evolved toward protectionism, intending to prioritise domestic industries over international commerce.

In the United States, the Trump administration’s continuation of trade battles, including the imposition of new tariffs on a variety of imported commodities, has further undermined the free trade concept that had gained traction in previous decades.

These protectionist tactics are not restricted to the United States; countries all around the world are taking similar positions, changing tariffs, and instituting regulatory barriers that impede commerce.

This wave of nationalism not only impedes economic interoperability but also risks sparking retaliatory actions among trading partners, producing an unstable atmosphere that could lead to market fragmentation on a global scale.

The future of global trade: uncertainty looms

The future of globalisation is uncertain, as nationalistic sentiments rise and protectionist measures shape trade policy.

While it is difficult to anticipate the long-term consequences of the Trump administration’s current trade policy, many experts warn that the combination of new tariffs and shifting political priorities may leave a lasting impact on global trade dynamics.

The complexity of modern supply chains requires strategic planning and adaptability.

As businesses reconsider their foreign relationships, the option of shifting production closer to home or diversifying suppliers may become a popular trend.

However, this reconfiguration requires time and capital, which adds to the unpredictability in the immediate term.

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Japan navigated another year of overall trade deficits, but a ballooning surplus with the United States has emerged as a critical point of focus, particularly as Japanese negotiators engage in tense discussions with the Trump administration over potential and existing tariffs.

Finance Ministry data released Thursday paints a complex picture of Japan’s trade dynamics against a backdrop of global economic friction.

Provisional statistics revealed that for the fiscal year ending in March, Japan recorded a global trade deficit totaling 5.2 trillion yen (approximately $37 billion).

This marked the fourth consecutive year the nation imported more goods and services than it exported overall.

Driving factors included a 4.7% rise in annual imports, exacerbated by a weaker Japanese yen which inflated the cost of bringing goods into the country.

However, overall exports also climbed 5.9%, boosted by robust shipments of vehicles and computer chips, as well as a notable influx of foreign tourists whose spending counts towards exports.

Contrastingly, Japan’s trade relationship with the United States yielded significantly different results.

The trade surplus with the US surged to 9 trillion yen (around $63 billion) during the same fiscal year.

This growing imbalance stands as a particularly sensitive issue for US President Donald Trump, who has frequently targeted such surpluses in his trade rhetoric.

Navigating the tariff gauntlet

The release of these figures coincides with ongoing negotiations in Washington, where Japanese officials are working to counter US tariff threats.

Japan, a long-standing key ally and major investor in the United States employing hundreds of thousands of Americans, finds itself navigating a challenging trade environment.

President Trump initially announced plans on April 2 to impose broad tariffs, including a potential 24% levy on imports from Japan.

While market reactions prompted a partial 90-day suspension of these new tariffs for many nations (excluding China, which faced increases up to 145%), Japan still confronts significant trade barriers.

It currently faces a 10% baseline tariff on various goods, alongside recently imposed 25% taxes on crucial exports like cars, auto parts, steel, and aluminum.

These duties present a considerable challenge for the administration of Prime Minister Shigeru Ishiba.

Monthly trends and shifting flows

Looking at more recent data, Japan registered a trade surplus of 544 billion yen (about $4 billion) for the month of March alone.

March exports saw a nearly 4% year-on-year increase, marking the sixth consecutive month of growth, although the pace slightly moderated compared to February.

Exports to the US grew by 3% in March, while shipments to the broader Asian region increased by 5.5%.

Notably, while direct exports to China decreased, shipments surged to other Asian economies like Hong Kong, Taiwan, and South Korea.

This pattern led some analysts to speculate about strategic shifts in trade routes.

“This is likely due to the rerouting of exports within Asia to avoid tariff conflicts with the US,” commented Min Joo Kang, a senior economist at ING, in a report.

Concessions on the horizon?

The high stakes of the ongoing negotiations have fueled speculation among some analysts that Tokyo might eventually offer concessions to appease Washington, potentially involving increased imports of American agricultural products like rice.

Rice is a culturally significant and traditionally protected staple in Japan, but recent domestic shortages have driven up prices, perhaps creating an opening for such a move.

As negotiations continue, the juxtaposition of Japan’s overall trade deficit with its substantial and growing surplus with the United States underscores the complex pressures shaping global commerce and bilateral relations under the current tariff regime.

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Oil prices rose on Thursday due to tighter supply expectations after Washington imposed additional sanctions on Iranian oil trade. 

Additionally, some Organization of the Petroleum Exporting Countries producers also pledged more output cuts to offset overproduction through June 2026. 

At the time of writing, the price of West Texas Intermediate crude oil on the New York Mercantile Exchange was at $63.68 per barrel, up 1.4%.

Brent crude oil on the Intercontinental Exchange was at $66.61 a barrel, up 1.2% from the previous close. 

Wednesday saw both benchmarks close 2% higher, reaching their highest levels since April 3. 

This puts them on track for their first weekly increase in three weeks. 

As Thursday marks the final settlement day of the week due to the upcoming Good Friday and Easter holidays, investors are keeping a close watch.

Sanctions on Iran

The Trump administration revealed new sanctions on Wednesday targeting Iran’s oil exports, with measures against a China-based “teapot” refinery also included.

“The move aims to ramp up pressure on Tehran amid heightened tensions over its nuclear program,” FXstreet said in a report. 

The US Treasury Department issued a statement that US President Donald Trump’s sanctions aim to reduce Iran’s oil exports to zero. 

The sanctions are meant to deter Chinese imports of Iranian oil as part of Trump’s “maximum pressure” campaign.

China has been the largest importer of Iranian oil over the last couple of years. 

Imports

Moreover, data from the customs authority showed that China’s overall crude oil imports increased to 12.1 million barrels per day in March. 

This figure was approximately 1.7 million barrels per day higher than imports in January and February, and it was almost 5% higher than imports in the previous year.

Carsten Fritsch, commodity analyst at Commerzbank AG, said:

A sharp rise in oil imports from Iran is being held responsible for this, even though China does not publish any official data in this regard.

Vortexa, the shiptracking agency, reports that seaborne oil imports have seen a significant rise, primarily fueled by record-high shipments from Iran to Shandong province.

Independent Chinese refineries are suspected of having imported oil from Iran in the run-up to the stricter US sanctions. 

Trump’s sanctions against Iran come at a time when trade tensions between the US and China are boiling.

Experts believe that Trump’s sanctions have been placed to pile on more misery for China’s economy. 

Less availability of cheaper Iranian barrels in the market would increase competitiveness of oil coming from the Middle East and Russia in the coming weeks. China is the world’s largest importer of crude oil. 

OPEC compensation plans

Adding to concerns about supply, Wednesday’s output cut compensation plan by OPEC+ further supported oil prices. 

OPEC announced on Wednesday that it has received revised plans from member countries Iraq and Kazakhstan, as well as other nations within the alliance, detailing their strategies to implement additional oil output cuts.

The updated OPEC compensation plan increases monthly production cuts, now ranging from 196,000 barrels per day to 520,000 barrels a day, effective from this month until June 2026, the cartel said in an official release.  

The previous plan had lower cuts, ranging from 189,000 barrels per day to 435,000 barrels a day.

The planned output cuts mean that the cartel’s decision to raise production by 411,000 barrels per day in May would be largely nullified. 

Eight members of the OPEC+ alliance, in a surprising move earlier this month, agreed to raise crude oil production by 411,000 barrels a day in May. This weighed on sentiments, and oil prices slipped as a result. 

The cartel is scheduled to start unwinding its voluntary production cuts of 2.2 million barrels per day from April by increasing output by 135,000 barrels a day. 

The market was expecting a similar rise in May as well.

Gains may not hold

The rise in oil prices this week may not hold as global demand is likely to be negatively affected due to the ongoing trade tensions. 

The International Energy Agency this week lowered its forecasts for growth in global oil demand sharply for 2025, citing concerns about US tariffs. 

OPEC in its monthly report also cut 2025 demand forecasts for the first time since December. Though, it was only a slight downward revision compared to IEA. 

“If we see a long-lasting trade war through 2025, Rystad Energy projects a 15% reduction in 2025 global GDP growth – from 2.8% to 2.4% – which would lower our oil demand growth forecast from 1.1 million barrels per day (bpd) to 600,000 bpd – an almost 50% decrease,” said Janiv Shah, vice president, commodity markets analysis, oil, at Rystad Energy. 

However, we expect supply corrections and disruptions, along with rising energy demand in the northern hemisphere summer, to keep Brent prices around $70 per barrel.

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Shares of Wipro Ltd dropped as much as 6.3% on Thursday after the IT services firm issued a disappointing revenue forecast for the June quarter, raising concerns of a third consecutive year of decline amid persistent global tech spending cuts.

India’s fourth-largest IT exporter said on Wednesday it expects revenue in the April-June period to fall between 1.5% and 3.5% sequentially, with new Chief Executive Srini Pallia warning that “uncertainties have dramatically increased” going into the new fiscal year.

The guidance, analysts said, marks a worrisome start for fiscal 2026 and signals continued headwinds despite a leadership change.

Pallia, who took over in April 2024 following the abrupt exit of Thierry Delaporte, inherits a company grappling with a string of weak quarters, stalled large deals, talent attrition, and market share erosion.

Wipro shares were down 5% as of 11:51 am IST on Thursday, extending their year-to-date decline to 22.4%.

While that is marginally better than the broader Nifty IT index’s 24.8% fall, it underscores growing investor scepticism about the firm’s prospects.

Analysts warn of a third year of revenue contraction

Brokerages were quick to flag that Wipro’s first-quarter guidance could derail any early hopes of a recovery.

“The first quarter guidance sets the stage for another challenging year following two years of revenue decline,” analysts at Phillip Capital said in a note.

Several firms—including Nomura, Nuvama, Emkay, and ICICI Securities—trimmed their FY26 and FY27 earnings estimates, citing elevated macroeconomic uncertainty, slowing transformation project spends, and the lingering impact of geopolitical tensions and tariffs, particularly in key markets like the United States.

Nomura cut its FY26 earnings per share (EPS) estimates by 2–4% and revised the target price to ₹280 from ₹300.

It maintained a Buy rating, citing improved shareholder return policies, but warned that its earnings projections remain 8–9% below Bloomberg consensus.

Nuvama downgraded the stock to Hold and reduced its price target to ₹260, stating that Wipro’s weak first-quarter guidance jeopardizes the turnaround thesis.

The brokerage lowered its FY26/27 EPS estimates by up to 3.7%.

Muted forecast triggers widespread downgrades

At least nine out of the 39 analysts covering the stock have downgraded their ratings, while 20 have cut their price targets, according to LSEG data.

The average analyst rating remains at “Hold”, but the median target price has declined by nearly 14% to ₹250 over the past month.

Emkay Global said the company’s Q1 outlook factors in both potential demand recovery and further weakness.

It maintained a “Reduce” rating with a ₹260 target, highlighting low near-term visibility despite a strong deal pipeline.

ICICI Securities termed the March quarter’s performance “abysmal,” citing weak revenues and macro concerns—especially in discretionary-heavy sectors like auto and manufacturing.

The firm said the lone bright spot was the total contract value (TCV) from two large deal wins, but added that Wipro’s key challenge lies in translating orders into revenues and stabilising its European operations.

Brokerages remain cautious as growth triggers remain elusive

Motilal Oswal Financial Services (MOFSL) cut its FY26/FY27 EPS estimates by around 4%, anticipating a 1.9% YoY revenue decline in constant currency terms.

The brokerage retained its Sell rating with a target price of ₹215, implying a valuation of 17 times FY27 earnings.

Though some brokerages note positives such as improved capital allocation policies and a projected FY27 dividend yield of 4%, consensus suggests that the near-term outlook remains grim with little to spark a re-rating in the stock.

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Millions of jobs. Billions in output. A key driver of the US labour market for over two decades will be shaken up. 

The Biden-era approach to immigration left room for labour force participation and tax contribution from undocumented immigrants. The Trump administration is moving in the opposite direction, that is mass deportations.

Backed by as much as $175 billion in new funding, the administration is building what officials describe as a tech-powered, private-sector-driven “deportation machine.”

The scale of disruption is measurable, and far more significant than most political rhetoric suggests.

How much labor does the US actually stand to lose?

According to a report by Baker Institute, the US is home to an estimated 11 million undocumented immigrants. Around 8 million of them are working. They make up 3.3% of the population and nearly one-fifth of the foreign-born labour force. 

Those numbers may seem modest at the national level, but their concentration in key industries is what makes them economically significant.

Agriculture is the most exposed. Over 41% of all farm workers are undocumented. In the broader food supply chain, roughly 1.7 million workers fall into this group. On an absolute basis, the construction sector is the largest employer of undocumented workers, making up 14%, according to a recent report by Oxford Economics.

Source: Oxford Economics

In states like California and Texas, immigrants make up 40% of the construction workforce. Across the country, 14.2% of construction workers are undocumented.

Manufacturing employs another 870,000 undocumented immigrants. Hospitality holds around 1 million. Transportation and warehousing add 461,000 more. These numbers are not easily replaced.

The US is already facing labour shortages. In 2023, there were 3.2 million job openings the market could not fill. 

As fertility rates drop and the population ages, immigration has been the main force sustaining labour supply. Deporting a sizable chunk of the undocumented workforce would reverse that trend.

Can businesses adjust, or would prices spike?

Not every industry can simply raise wages and move on. Some operate on thin margins. Some face global competition. 

In agriculture, for instance, wages make up a large share of costs, and productivity gains are slow. Prices at the supermarket would go up, and output may shrink as producers scale back.

Construction faces a different but equally serious challenge. Replacing workers takes time. Laborers may be less skilled than subcontractors, but they are essential. 

Wage growth in construction already outpaces the broader economy. Hourly earnings rose 4.4% in Q4 2024, a full percentage point above pre-COVID averages. 

The National Association of Home Builders estimates that labour makes up nearly 25% of the cost of a new home. With fewer workers, costs rise, projects get delayed, and housing becomes less affordable.

Oxford Economics estimates that deporting half of the undocumented construction workforce would cut sector growth in half through 2028. 

That means over $55 billion in lost output. Efforts to replace labour with automation won’t work fast enough. Construction has seen some of the lowest productivity growth in the economy for decades.

What about the bigger picture: GDP, inflation, and taxes?

Studies project that mass deportations could reduce GDP by 2.6% to 6.2% over the next decade. That is a staggering figure in an economy of over $27 trillion.

The pressure would also show up in prices. A 9.1% increase in the general price level by 2028 is one projection tied directly to widespread deportation efforts.

Tax revenues would likely fall. Undocumented immigrants contribute approximately $60 billion annually in local, state, and federal taxes. 

Over their lifetime, they contribute $237,000 more in taxes than they receive in benefits. Removing this group shrinks the tax base and pushes up deficits.

Even for US-born workers, there’s little to gain. Past deportation waves did not lead to higher wages. In fact, removing 500,000 immigrants from the labor force could cost native-born workers 44,000 jobs. Fewer workers means less demand across the economy.

Can the deportation machine actually scale?

ICE deported about 271,000 people in FY 2024. In March 2025, monthly deportations dropped to 18,500. That’s well below the target of 1 million per year. So the bottleneck is not policy; it’s capacity.

ICE employs roughly 5,500 field agents. Its planes can carry only about 135 deportees per flight. Its daily detention limit is around 49,000 people. 

But Trump’s team is pushing hard to change that. Contracts worth $45 billion have been floated to build new detention centers. 

Tent facilities from the Biden era are being repurposed into jails. Funding is being requested to hold over 100,000 people at once.

The private sector is being brought in at scale. According to federal contracts, Palantir received a $30 million contract upgrade to supply ICE with AI-powered targeting and enforcement tools.

Officials are looking to manage deportations with logistics platforms, drawing comparisons to Amazon Prime. 

Apparently, “deportation-as-a-service is not just a slogan. It is an operational model in the works.

What does this mean for Mexico and the border?

Mexico stands to feel the economic aftershock. In 2024, it received $65 billion in remittances, representing 3.3% of its GDP. 

Many of these transfers come from undocumented workers in the US. Deportations would cut off that stream.

The Mexican government has responded with programs to support returning migrants, but resources are limited. Cuts to consulate budgets and immigration offices raise doubts about implementation.

Trump’s tariff threat further complicates matters. A 25% tax on all Mexican imports could slow trade and push Mexico toward a recession. That, in turn, could drive more people to attempt migration north.

The irony is hard to miss. An economic crackdown on immigration may well fuel the very patterns it aims to stop.

Where does this leave the US economy?

If the goal of mass deportation is to restore jobs and wages for US citizens, the evidence doesn’t support it. 

Most undocumented immigrants work in jobs Americans have long avoided. Their removal wouldn’t fill gaps but it would rather widen them.

Labour-intensive industries would shrink. Prices would climb. Housing projects would stall. Tax revenues would fall. The logistics of deporting millions are expensive, slow, and disruptive.

A more economically sound approach would be to fix the visa system, expand legal pathways, and recognize the long-term contribution of workers already here. 

For now, the US is heading toward a test of whether it can forcibly reshape its economy without breaking it.

The test is whether the economic engine can keep running with fewer hands on deck. That’s what the current administration is betting on.

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