How far, how fast is the retreat?

Daily update

Federal Reserve Chair Powell pointed out that uncertainty had risen, and that inflation and unemployment might rise. These are all eloquent statements of the obvious. leaving the Fed reacting to data. Central banks that react rather than pre-empt data tend to be late in changing policy. Economic data is also increasingly less reliable, making data dependency more dangerous.
US President Trump declared they will announce trade developments with a “big and highly respected” country. It could be the penguins of the Heard and MacDonald islands. It could be the UK (the UK does not always appear to have a trade surplus with the US). Markets only really care how far and how fast Trump retreats from tariffs.
A promise of some kind of trade deal is unlikely to affect the Bank of England policy decision. Global disinflation trends (ex-US) give the bank room to cut rates. Sweden’s Riksbank is expected to leave rates unchanged (its policy rate is already half that of the UK).
The data calendar offers limited information. US first quarter productivity and unit labor cost data relates to the before times, and it is trade taxes and profit-led inflation rather than labor markets that are likely to drive US prices in the near term.