Market analysis: Markets' disregard for Trump's latest tariff threat poses risks

Brent Schutte, chief investment officer at Northwestern Mutual, said the Fed, like the market, remained sceptical about the economic outlook and was increasingly divided internally. While dissenting voices will not determine the direction of policy by themselves, they reflect broader uncertainty at the central bank. A key variable is Mr. Trump's latest 25 per cent tariff on India. Mr. Schutte said the market was largely ignoring the latest tariff threat, believing the White House could turn around if necessary. But he warned that such bets could be risky, especially as companies start to pass on the cost of tariffs to consumers. Still, real private domestic procurement spending in the US has slowed markedly before the full impact of the tariffs becomes apparent. Once companies raise prices, the Fed will soon be caught in a difficult trade-off between "rising inflation and a slowing economy".