Federal Reserve Bank of New York president John Williams said he now expects “real GDP growth will slow considerably from last year’s pace, likely to somewhat below 1 per cent”.

“Long-run inflation expectations climbed from 4.1 per cent in March to 4.4 per cent in April, reflecting a particularly large jump among independents,” it added.

The tech-heavy Nasdaq soared 12.2%. This marked the best day for the S&P 500 since October 2008. The Nasdaq posted its best day since January 2001 and its second-best day on record.

The overall CPI declined 0.1 per cent from a month earlier, the first decrease in nearly five years, and rose 2.4 per cent on a year-over-year basis.

To increase share investment while a slew of listed firms announced share buybacks as Beijing stepped up efforts to stabilise a stock market rocked by U.S. tariff woes.

China announced additional tariffs of 34 per cent on US goods on April 4, striking back at US President Donald Trump and escalating a trade war that has fed fears of a recession,

The 27-nation bloc faces 25 per cent import tariffs on steel and aluminium and cars and “reciprocal” tariffs of 20 per cent from Wednesday for almost all other goods.

Mr Powell spoke as equity markets from Tokyo to London to New York continued a swoon that has wiped some 10 per cent off major US stock indexes

Credit ratings agency Fitch warned that if tariffs remain in place for a prolonged period, “many countries will likely end up in a recession. You can throw most forecasts out the door”.

US equity index futures tumbled more than 4 per cent after Trump announced a sweeping series of tariffs following the market close on Wednesday (Apr 3),

But that halved figure includes “the combined rate of all their tariffs, nonmonetary barriers and other forms of cheating,” he said.

The fear is that reciprocal tariffs to be announced on April 2 would “cause an economic slowdown”, said Mr Adam Sarhan of 50 Park Investments.