Shares of banks and other financial institutions fell sharply as traders reassessed the likely impact of the Trump administration's trade and economic policies.
Investors had wagered that Trump would back down from brinkmanship over tariffs. Should a multi-front trade war with China, Canada and Mexico ensue, consumer prices are likely to rise, tying the Federal Reserve's hands on rate policy. With the Fed unable to act as a safety net for the labor market and asset prices, the current economic slowdown could gather downward momentum, economists say. Asked about the prospect on a Fox News interview over the weekend, Trump did not rule out a recession.
One money manager said interest rates in Europe are likely to remain elevated in a new financial era. "U.S. tariffs and Europe boosting fiscal stimulus reinforce our view of policy rates staying higher versus pre-pandemic levels," said strategists at money manager BlackRock.
Mortgage firm Rocket agreed to buy online real-estate brokerage Redfin in an all-stock deal valuing Redfin at $1.75 billion.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
March 10, 2025 17:18 ET (21:18 GMT)
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