For four consecutive months, economists have predicted that U.S. inflation would surge, largely due to President Trump's trade policies and the anticipated economic impact of his tariffs.
Inflation Data Defies Predictions
Tariffs Today: A Compendium
Tariffs have long been used globally to support local industries by incentivizing citizens to purchase domestically made products. At the turn of the 20th century, tariffs were the primary source of tax revenue for many nations. Today, funding comes from income, payroll and corporate taxes. In the U.S., tariffs accounted for approximately 90% of federal income until the Civil War. After World War II, tariffs fell out of favor in developed economies because they often led to reduced trade, higher prices and retaliation from abroad.
May Flowers
As the final days of May unfold, American consumers are feeling notably more optimistic. After several months of declining sentiment, the latest consumer confidence data showed a strong rebound from an almost five-year low, with the increase largely attributed to easing trade tensions.
A Break From Tariff Talk
This week, for the first time in months, tariff news was overshadowed by economic and earnings headlines. Those of us in the business of analyzing the market and economy can agree that this was a refreshing shift.
Independence Day
Independence Day may evoke visions of fireworks and parades or perhaps memories of the 1996 summer blockbuster movie where aliens hovered over The White House. While no actual fireworks or aliens were involved, this past Tuesday was probably the most pressing “Independence Day” for our country’s central bank as Federal Reserve Chair Jerome Powell’s political independence was put to the test.
Short Week, Big Moves
As February draws to a close, so does our first quarter outlook season. We enjoy hitting the road and sharing our 2025 Investment Outlook with clients and colleagues, and are grateful for the chance to come together and look forward to what's ahead.
Investment Strategy Second Quarter 2025
While market volatility has been highly-elevated in recent weeks with the almost daily change in the proposed tariff landscape, in this quarter’s investment strategy video we endeavor to provide a measured perspective on what lies ahead and how navigate the psychology of investing.
Return of the Vigilantes
This week, equity market volatility continued due to last week’s announcement of global tariffs. Investors, attempting to handicap the potential impacts on the U.S. economy and corporate profits, caused a bond market rally by selling risky assets (stocks) and buying safe assets (government bonds). However, something changed over the weekend. The 10-year U.S. Treasury yield started the week at 3.9% and, by Tuesday evening, had reached 4.5%.
Shock and Awe
This week, the presidential inauguration and subsequent flurry of executive orders left investors deciphering what is ‘signal’ versus ‘noise’. Fortunately, in the background, public companies have started reporting fourth quarter earnings and reveal expectations for the year ahead.
Pick Your Poison
Equity markets surged on Monday only to come under pressure to close the week at a 1.5% loss. Absent a rally greater than 4% on Monday, this will be the first quarter since the summer of 2023 when investors have lost money in domestic stocks.
Tariffs and Volatility: Turn Down the Volume
This week, we sent this communication to all Ferguson Wellman and West Bearing clients in response to heightened market volatility. We felt that this message was also appropriate to reiterate for our weekly blog.
The Tariff Tantrum
After last November's presidential election, it was widely understood that tariffs would be on the agenda for 2025. Early this year, however, markets largely shrugged off these concerns, viewing tariff threats primarily as a negotiating tactic rather than a serious economic risk.
Tariff Tantrum
Over the last week, the tariff rhetoric hit a heightened level with the threat of 25% tariffs on products coming in from Mexico and Canada, as well as 10% on China.
Trimming the Fat: Uncle Sam's New Diet Plan
The 2024 U.S. presidential election of Donald Trump has sparked optimism in the financial markets and corporate sentiment. While some of this enthusiasm may be attributed to the end of a tumultuous election, the positive market reactions in the immediate aftermath—including rising stock prices, declining bond yields and a strengthening dollar—suggest that domestic and international investors are responding favorably to Trump's proposed policies.