Global news wrap: 100 days of Trump, monetary polices, Pope’s passing

Trump's tectonic trade shifts hit the dollar

The first 100 days of Donald Trump’s second term as US President have been marked by a whirlwind of economic policies that have created uncertainty in global markets. The spotlight has largely been on trade tariffs and his stance against China, the effects of which have extended to both the US dollar and gold markets. 

Since Trump’s return to office on 20 January, the dollar index has fallen nearly 9%, its worst performance in the first 100 days of any presidency since the Nixon era, when the US abandoned the Bretton Woods system. 

The decline in the dollar comes amid escalating trade tensions and perceived instability in US economic policy. As the dollar weakens, gold has surged to record highs as investors have flocked to the precious metal as a safe haven, driven by rising concerns over inflation and a potential recession. While there are worries over the disruptions caused by Trump’s tariffs, the International Monetary Fund (IMF) has ruled out a recession in the world’s largest economy.

Also read: Trump’s solar panel tariffs deal climate action a severe blow

Monetary policy outlook: expect caution

As several central banks gear up for their monetary policy reviews in May, markets are largely anticipating a cautious tone. Escalating tariff tensions, political noise, firm inflation in many countries, and slowing growth have clouded the economic outlook, which could trigger rate cuts or at least a status quo in many countries. 

The US Federal Reserve faces mounting political pressure from President Donald Trump to cut rates, as he blames high borrowing costs for slowing the economy. However, Fed officials argue it's too early to move, pending clarity on tariff-driven inflation risks. 

Also read: Trump’s attacks on Powell are strategic. They may not be about firing the Fed chair.

In Japan, the central bank is expected to keep rates steady, wary of a weakening yen and external shocks, even as domestic inflation inches closer to its 2% target. 

The Bank of England and Bank Indonesia are also expected to hold policy rates unchanged, citing fragile economic conditions and volatile capital flows. With global risks mounting, central banks are largely seen prioritizing stability in an uncertain time.

An American economic pillar is shaking

With an almost 14% contribution to the national GDP, California has long been a pillar of the US economy. In 2024, the state's GDP reached $4.1 trillion, which is now higher than that of Japan, the world's fourth-largest economy. As developed nations struggled to maintain a good pace of growth in 2024, California's economy grew 6.01% in 2024, outpacing not only US GDP growth of 5.3% but also that of economies such as China (2.6%) and Germany (2.9%). 

However, despite its economic power, California faces significant challenges. As of March 2025, the state’s unemployment rate stood at 5.3%, higher than the national average of 4.2%. The state's economy, which spans industries from Silicon Valley tech to agriculture, is also vulnerable to the impact of Trump's tariffs, which threaten to cost it billions. In response, California recently filed a lawsuit claiming that tariffs were hurting its economy and questioning their legality.

IMF highlights global debt strain

The IMF has raised alarms about rising global debt, forecasting a significant increase in the coming years. According to its April 2025 Fiscal Monitor, global public debt is set to rise by 2.8 percentage points in 2025 to 95.1% of GDP. This surge is expected to continue, potentially pushing debt levels close to 100% by 2030, surpassing even pandemic-era peaks. 

Also read: Debt issuance by governments of rich countries to hit record high, OECD says

In the US, debt could rise to 122.5% of GDP in 2025, primarily driven by increased military spending and fiscal support. Meanwhile, Japan, already carrying debt that's more than 200% of GDP, faces ongoing challenges due to demographic pressures and slow economic growth. 

Emerging-market economies are particularly vulnerable, with rising interest rates and fiscal strains. China's debt is expected to rise to 96.3% of GDP, while India's is projected to reach 80.4%. To address these challenges, countries will have to promote economic growth, cut unnecessary spending and implement fiscal reforms.

Pope Francis laid to rest

The passing of Pope Francis, the first Latin American and Jesuit leader of the Catholic church, has brought an end to a 12-year-long papacy dominated by compassion and a progressive stance. 

At the time of his death, Pope Francis was the second-oldest pope to serve in over 400 years. In the current century, Benedict XVI, elected in 2005, comes close at 85.8 years old. Pope Francis’s legacy is largely seen as a moral compass in an increasingly divided world as he often highlighted the plights of the poor, migrants and marginalised, and earned the name ‘pope for the poor’. 

While his humanitarian approach unsettled several conservative voices, a lack of reforms on several fronts related to women’s rights, such as ordaining women as deacons and priests in the church, also upset progressive Catholics.