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 7:45am CT on 5/30/2025

Growth: An Emotional Roller Coaster

Consumer confidence rebounded in May. The announcement of lower tariffs on China helped send consumer expectations significantly higher. This was after consumer confidence hit a five-year low in April. The ups and downs of emotions aren’t showing up in consumer spending, yet. Initial claims for unemployment have increased, but only up to what used to be considered average. As long as people have jobs, they’ll spend whether they’re happy or sad.

Inflation: Taking The Stairs

The Fed’s minutes said heightened uncertainty merits a wait and see approach to policy. While the Fed is waiting and seeing, what we’re hearing from companies is that tariffs are having a mixed effect on consumer prices. It all depends on the product. Price increases will happen to varying degrees over various timeframes. Price increases may look more like a staircase than an elevator. The Fed seems to think tariff-induced inflation will happen faster than any growth slowdown. They may be wrong about that.

Policy: Business As Usual

The Court of International Trade struck down President Trump’s use of the International Economic Emergency Powers Act to impose tariffs. The administration appealed the decision, but it could also use other powers to get to a similar outcome. One route is to string together different presidential powers to effectively get to the same place we were before the ruling. The court put up a wall, but the administration may try climbing over the wall through an appeal, or side-stepping around the wall by using other powers. It remains business as usual.

Looking ahead: Rally No Matter What?

When the news hit on Wednesday evening that the tariffs where put on ice, markets rallied. When the news hit on Thursday that the tariffs were put back in place until the appeals court could consider the case, markets faded a bit, but still ended higher on the day. Maybe it’s more than just tariffs that are moving markets. It could be that earnings have been–generally–outstanding. Yes, some companies are reporting large cost increases from tariffs, but the trajectory for earnings at the broad index level still seems onward and upwards.