Comments based on information available as of 7:30am CT on 3/14/2025
Growth: From Bump To Slump? 
Consumer and business sentiment jumped higher after the election, but both have since slumped. There is little relationship between what consumers say they’re feeling and how they’re spending. The change in business sentiment is a little more worrying since it can show up quickly with capital expenditures and hiring plans. It could take a change in the “tone from the top” to turn the slump into a recovery.
Inflation: Wait For It?
The February inflation numbers were better than many expected. The price levels in February could serve as a type of baseline by which economists and consumers will be able to gauge the price effects of tariffs. It is likely that we will see an increase in some producer prices before we see consumer prices rise. However, if there is a rapid change in consumer prices, the Fed might feel compelled to squawk hawkishly. A quick increase in consumer prices might be viewed as a spark that needs to be extinguished.
Policy: Chainsaws Over Scalpels
Big change takes big tools. You can’t cut through a thicket with a scalpel. That was the messaging from President Trump on the campaign trail and it seems to fit with his rhetoric and actions while in the White House. It’s surprising that the market and media seem surprised by this. By pursuing a “tariff-first, talk later” approach, the talks can hopefully come to a resolution rapidly.
Looking Ahead: Waiting Is The Hardest Part
We don’t think it’s possible to consistently pick market bottoms. We try to approximate the bottom by taking a nibble here and there when it looks like the market is getting too gloomy about the forecast. Volatility is high. Investor and news sentiment indicators are very bearish. Past performance is no guarantee of future results, but sticking with an allocation after these types of moves has often been better than abandoning them.
