Financial market volatility increased again this week, as investors reacted to news that the United States was planning to escalate the trade war with China. Over the last few months, market participants have felt that with the economy seemingly on steadier footing and the Chinese seemingly having made some progress in addressing some of the complaints from the Trump administration, the risk of a trade war had greatly diminished. In reality, this was never the case. In this week's Economics Weekly, we discuss the ongoing trade dispute and the implications for the economy and financial markets.
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Richard de Chazal, CFA is a London-based macroeconomist covering the U.S. economy and financial markets.