The Battle for the Consumer: Inflation Expectations and Their Reflection in Retail Sales

This week, the markets will once again focus on Donald Trump, who is expected to announce a general reciprocal tariff on goods from all countries. In particular, the president announced his intention to introduce 25% tariffs on steel and aluminum imports as part of his aggressive trade policy. It is worth noting that although Trump can initiate a bill on reciprocal tariffs, its adoption requires the approval of Congress, which limits the new president's options.

Financial markets are showing a mixed reaction on this news background: Dow Jones futures increased by 80 points, while the S&P 500 and Nasdaq showed a slight decline. Trump also recently mentioned possible investigations into US government debt payments, adding uncertainty to the market.

The focus will also be on Federal Reserve Chairman Jerome Powell's testimony before Congress, where he will answer questions about the impact of tariffs on inflation and monetary policy. Investors will be watching his comments, especially in the context of a possible rise in inflation.

It is important to note that this week also sees key economic data from the US, including CPI inflation (Wednesday) and PPI (Thursday). Retail sales figures, due out on Friday, are of particular interest as their rise in the fourth quarter may have been triggered by the expectation of tariff hikes and the data may now be on the decline, in line with the trajectory of the Fed rate cuts.

In other sections and regions, we note that the latest Chinese inflation report showed an increase, which could put pressure on the country's economy in the face of new tariffs. Gold has reached record levels on increased demand for safe-haven assets, while oil prices have started to rise after three weeks of declines.