This calls into question the sudden optimism that washed across financial markets following the US-China trade truce. It's hard to believe it's been less than a week since the world's two largest economies agreed to reduce reciprocal tariffs and put them on pause for 90 days.
The speed with which economists raised their growth forecasts on the detente, and the scale of the rally across financial markets, was pretty remarkable considering the damage from tariffs has yet to be felt and the amount of uncertainty that is still hanging.
But markets brushed all that aside and ended a remarkable week on a strong footing. The S&P 500 and Nasdaq rallied 5% and 7%, respectively, to their highest in two months, and the Nasdaq is up 30% since April 7. The Dow's rebound means it has recouped its 'Liberation Day' losses and is now flat for the year.
Other markets have moved a lot too. Germany's DAX hit a record high and is also up 30% from the April low, the MSCI World index has risen in 17 of the last 19 sessions, and safe-haven gold fell 4%, its steepest weekly loss this year.
The U.S. and European earnings season is drawing to a close, and although some big firms pulled guidance or issued profit warnings due to the tariff uncertainty, results and the outlook were broadly positive.
Renewed growth optimism, therefore, would appear to be partly behind the rebound in bond yields. Fed rate cut expectations and projections for further Chinese stimulus have been pared back, pushing up bond yields in both countries and beyond.
But U.S. fiscal worries are also brewing, and on Friday Republicans rejected President Donald Trump's tax package because it didn't go far enough on spending cuts. Watch this space.
Underscoring how difficult it is to make economic forecasts in these highly uncertain times, this week threw up some big data surprises - unexpectedly strong UK GDP growth in the first quarter, weaker-than-expected GDP in Japan, and the steepest fall in U.S. producer prices since 2009.
You wouldn't bet against similar surprises next week.
