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.
Growth: Past The Peak?
Just as manufacturing looked like it was starting to stage a comeback, services took a stumble. At least, that’s the preliminary message from the S&P purchasing manager indexes. Uncertainty and hesitation over trade policy may hold back growth for now. Growth may be past its peak, but it’s not past its “best by” date. A slowdown does not inevitably lead to a recession.
Inflation: Self-Fulfilling Expectations?
Executives are warning that they will hike prices if there are tariffs. Consumers–based on consumer sentiment and confidence surveys–are bracing for more inflation. Expectations of inflation can lead to actual inflation. The path of tariff negotiations will help determine the path of inflation. The near-term effects on inflation should, dare I say, be transitory.
Policy: The Moment Of Truth?
President Trump has set some deadlines that are quickly approaching. March 4, March 12, and April 2 are right around the corner. I’m sure there is a lot of diplomacy that is going on behind the scenes, so there’s no telling whether those deadlines will move, how much tariffs will actually change, or how long policies will last. If anything, at least the uncertainty will turn into certainty, for now.
Looking Ahead: The Bears Are Hungry
Rarely have there been so many bears so close to a new high. Nearly 61% of the American Association of Individual Investors (AAII) survey respondents are bearish. Usually, bearishness peaks at the market bottom. That’s why many people view these sentiment indicators as contrary signals. Bearishness can increase, but over the last 10 years it’s only been higher back in September 2022. It peaked at the bottom of the nine month long bear market.
*Comments based on information available as of 7:00am CT on 2/28/2025
