 Dollar fell broadly today, an unusual development in contrast to recent rallies on escalating trade tensions and tariff announcements. Market sentiment soured as traders began to weigh the risks of a “Trumpcession,” a new term coined to describe the potential for US President Donald Trump’s policies to drive the economy into contraction or a full-blown recession. A major trigger for today’s shift in risk sentiment was the latest Atlanta Fed GDPNow estimate, which plummeted to -2.8% for Q1 2025, compared to -1.5% just days ago on February 28. This marks a dramatic deterioration in economic expectations, signaling that growth could already be already contracting at an alarming pace. Markets are increasingly recognizing that the tariff impact is not just theoretical—it is already weighing on consumption and business investment, and the effects could worsen in the coming months. The first round of US tariffs officially took effect today, with a 25% levy imposed on Canada and Mexico, alongside a 20% additional tariff on Chinese imports. While this was expected, the concern now is the snowball effect. With more tariffs looming—including reciprocal tariffs set for April 2 and possible new levies on Japan and China for alleged currency devaluation. Market pricing for Fed rate cuts is accelerating too. Fed fund futures now assign a 47% probability of a rate cut in May, up from just 26% a week ago. If economic data continues to deteriorate, expectations could quickly rise above 50%, signaling that markets believe Fed will have little choice but to step in and resume monetary easing sooner than anticipated. With overall sentiment on shakier ground, upcoming releases including tomorrow’s ISM services PMI and Friday’s non-farm payroll report have taken on added importance...... | 
