Royal Bank of Canada capital market analysts pointed out in the report that investors are currently more concerned about the US economic growth prospects and the risk of deflation due to tariff uncertainty, rather than a higher inflation rate. Although tariffs may have an inflationary effect in the long run, uncertainty about tariff implementation may weaken demand in the short term, cause slow economic growth, and may trigger deflation. “Given the extent of the global impact of equal tariffs and their potential negative impact on economic growth in the near future, this may be one of the reasons global and European stock markets have underperformed recently,” they said.

Royal Bank of Canada capital market analysts pointed out in the report that investors are currently more concerned about the US economic growth prospects and the risk of deflation due to tariff uncertainty, rather than a higher inflation rate. Although tariffs may have an inflationary effect in the long run, uncertainty about tariff implementation may weaken demand in the short term, cause slow economic growth, and may trigger deflation. “Given the extent of the global impact of equal tariffs and their potential negative impact on economic growth in the near future, this may be one of the reasons global and European stock markets have underperformed recently,” they said.