Here is the latest update from GPS Wealth.
Markets experienced a strong rebound during the month driven by a temporary pause in US-China and US-European tariff escalations, along with a federal court ruling against many Trump tariffs. The report highlights the “TACO theory” (Trump Always Chickens Out) by Financial Times journalist Robert Armstrong, suggesting that the Trump administration quickly backs down when tariffs cause economic pain. This resulted in Australian shares rising 4.2% and global shares surging 5.9% – the strongest monthly return since November 2023. Despite this positive momentum, ongoing concerns remain around trade tensions, inflation impacts from tariffs, and geopolitical risks including the Israel-Iran conflict which has spiked oil prices. Central banks including the Federal Reserve and RBA are maintaining cautious approaches to interest rate policy, with the RBA cutting rates by 0.25% to 3.85% while monitoring international developments. The Australian economy showed weakness with GDP growth of just 0.2% in the March quarter, though housing construction is improving and the overall recession risk remains low across major economies.