What U.S. Inflation and Trump’s Tariff Moves Could Mean for Traders Right Now

Trendsignal Commentary – June 2025

Markets have had a choppy week, and traders are watching closely as geopolitical noise and economic data once again intersect. The recent inflation report from the U.S. and renewed commentary from Donald Trump on China trade talks are two developments we think traders should not ignore.

Inflation Comes in Cooler Than Expected – Why That Matters for Traders

The latest U.S. inflation figures show that consumer prices rose just 0.1% in May, with a year-on-year increase of 2.4% – slightly below the forecast. More significantly, core inflation (excluding food and energy) also undershot expectations, coming in at 0.1% monthly and 2.8% annually, against forecasts of 0.3% and 2.9%.

For traders, this means one thing: interest rate expectations are shifting.

We saw bond yields drop and stock index futures turn positive on the news. When inflation runs cooler than expected, the Federal Reserve has less pressure to raise interest rates — and potentially more flexibility to cut them, especially with political voices like JD Vance and Trump pushing for looser monetary policy.

As traders at Trendsignal know, these kinds of macroeconomic cues often signal strong opportunities in index, forex, and commodity markets.

Tariffs: The Real Impact Is Still to Come

Trump’s ongoing trade manoeuvres — including his surprise “liberation day” announcement that slapped 10% tariffs on U.S. imports — haven’t yet hit consumer prices in a meaningful way. This is likely because businesses are still working through pre-tariff inventory and being cautious with pricing in a market clouded by demand uncertainty.

But make no mistake: the impact is coming.

Key sectors like automotive, technology, and consumer goods are likely to see price pressures ramp up as fresh inventories come in under new duties. That could spur volatility in both U.S. and global equities – and with the Fed watching inflation data closely, these developments could also swing interest rate expectations.

At Trendsignal, we help traders anticipate and trade these kinds of macro-driven moves with structured, rules-based systems – avoiding hype and focusing on the data and the charts.

What Traders Should Watch Now

Here’s what we believe Trendsignal traders should keep on their radar:

• Fed Rate Policy: With inflation tame, pressure is mounting for rate cuts. Markets are now pricing in potential Fed action from September onwards.
• Tariff Fallout: As old inventories clear, expect more noticeable price rises in goods by mid-to-late summer. This could trigger sector-specific volatility.
• Commodities & Energy: Energy prices continue to slip, with gasoline down 2.6% in May. For those trading oil or energy stocks, this trend is key.
• Data Accuracy Concerns: Trump’s hiring freeze is reducing the sample sizes of U.S. inflation data, raising questions about reliability. Volatility could spike if markets lose trust in the numbers.

At Trendsignal, we always advise our clients: don’t chase headlines, trade the strategy.

Events like this inflation surprise and ongoing tariff talk are where a structured approach gives traders an edge. Our trading systems, expert coaching, and live sessions are built around helping individuals like you make sense of the noise - and turn it into opportunity.

If you’re not already attending our free expert-led trading webinars, now is a great time to get started.

Learn how to read the markets with clarity – the Trendsignal way.