Macro & Market Musings are weekly insights on Growth, Inflation, Policy and Looking Ahead from Annex Wealth Management’s Chief Economist, Brian Jacobsen. Brian, a frequent contributor on CNBC and Fox Business News, hosts regular updates on the economy and markets. Check our events page for Brian’s next live event.
Comments based on information available as of 7:15am CT on 5/16/2025
Growth: Time To Grow Up 
Many countries use an “infant industry” argument to justify trade barriers. Even the US has used that in the past. The logic is that trade barriers are done to help nurture an industry to the point where the companies can be competitive on a global stage. The problem is, at some point, companies need to grow up. Instead, they are inefficient and dependent on government protection for survival. US firms are some of the best in the world in creating consumer and shareholder value because they had to grow up a long time ago. Now it’s time for other countries to learn this parenting lesson.
Inflation: Sigh Of Relief
April inflation was lower than many expected. There were a few signs of the price effects of tariffs in things like household furniture and audio equipment, but there were more signs of relief than signs of stress. Egg prices fell more than 12% as the bird flu stops disrupting production. Gasoline prices fell 0.1%. Turning down the volume on tariffs can help calm consumer nerves about incipient inflation, but 10% or 30% tariffs are still tariffs. Even companies promising everyday low prices are warning those prices are going to start reflecting these tariffs.
Policy: Anchoring
When negotiating, by throwing out a very high initial number (the anchor), you can influence the other party’s perception of what’s reasonable. Even after making concessions, the final number tends to be closer to your initial, inflated number than it otherwise would have been. By ratcheting up tariffs to 145% on China, even 60% would have seemed more reasonable. Coming in at 30% was simply delightful even if it’s higher than many would like for the long-term.
Looking Ahead: Useless Targets
We don’t give price targets on the major indexes. We have a view on the direction, but a number as of an arbitrary date–like the end of the year–isn’t helpful for long-term investing. When the S&P 500 was at its high on February 19, many Wall Street firms were revising their targets higher. When markets fell, they quickly revised them lower. Now that we’ve had a strong bounce off the April 9th levels, they’re once again chasing prices higher. Wall St. estimates are more for entertainment, not educational purposes.
