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 5:45am CT on 5/23/2025
Growth: Race Against The Clock 
Pausing high reciprocal tariffs on April 9th and then lowering tariffs on Chinese goods from 145% to 30% has resulted in a flurry of shipping activity. There is another window of opportunity for businesses and households to get goods while the getting is good. We will likely get a number of trade deals between now and July. It’s even possible that the President will decide that China is making enough progress on the fentanyl crisis that their 30% tariff could be reduced to 10%. All of this will mess with the macroeconomic data, but it could help improve consumer, business, and investor sentiment.
Inflation: Just Eat It
I’m a big Weird Al Yankovich fan. His parody of Michael Jackson’s Beat It was Eat It. So, when President Trump posted that Walmart should eat the tariffs, I couldn’t help but think of that song. Some prices have already gone up. If prices don’t rise, another option is to just stop stocking some items. Different companies will take different approaches, which is the beauty of capitalism. The challenge for investors is that companies that eat the tariffs might not have as much earnings as a result.
Policy: Lagging Or Lingering?
Moody’s downgraded the US government’s credit rating. Credit ratings are supposed to reflect the likelihood of the debtor defaulting on its debt, so credit ratings seem a little silly for a debtor like the US government who also prints the currency the debt is paid in. Moody’s didn’t tell anyone anything we didn’t already know, which is why Treasury Secretary Bessent said it is a “lagging indicator.” The trend of large annual deficits and growing interest expense has to stop. The question is whether it will happen incrementally over time, or if it eventually requires tough medicine.
Looking Ahead: Sell In May
The old adage of “sell in May and go away” isn’t good investing advice. The original saying was about coming back after St. Leger’s Day (a horse race that marked the end of summer). The data supports that the six month returns between October through April are–on average–higher than between May and September, but that doesn’t mean the average return between May and September is negative. In fact, it is often better than the return on sitting in cash. So, going away after May for a little vacay might make a lot of sense, but it doesn’t make good investing advice, especially after considering taxes, transaction costs, and the perils of trying to time a graceful exit from and entry back into the markets.
