Tariffs' Swift Impact Alarms Citybear's Griffin, Bank of Canada Warns of Market Disruption, Bank of England Keeps June Rate Decision Open

Citybear Investment founder Ken Griffin expressed alarm at the rapid impact of tariffs, stating that he had anticipated the effects to unfold over several years, not mere weeks. He criticized the tariffs for fostering crony capitalism, with governments picking winners and losers. Griffin's comments highlight the immediate and significant disruption caused by tariffs, which he described as "chilling" in their swift manifestation.

The Bank of Canada has issued a warning about the ongoing tariff disputes, stating that they are disrupting markets and increasing the risk of disorderly sell-offs. This disruption could strain the country's financial system, as persistent uncertainty in U.S. trade policy could trigger further market volatility and sudden asset re-pricing. The bank also expressed concern over the expanding presence of leveraged hedge funds in the Canadian government bond market, noting that rapid deleveraging by these investors could amplify further price declines.

In the United Kingdom, Bank of England Governor Andrew Bailey maintained an open stance on the rate decision for the June meeting. This comes after the bank, amid internal disagreements, announced a 25 basis point rate cut, with a more hawkish voting outcome than anticipated. When asked if the market's near-exclusion of a rate cut in June was justified, Bailey responded that the next six weeks would see significant developments. He emphasized his open-minded approach to each meeting, stating that the bank's dynamic and permanent philosophy guides their decisions. Bailey's remarks underscore the bank's commitment to adaptability in the face of evolving economic conditions.