Market uncertainty is on the rise as US policy shifts continue to unsettle investors. President Trump’s return to office initially sparked optimism, but one month in, his alignment with the radical Project 2025agenda and disruptive trade policies, such as fluctuating tariffs on Canada and Mexico, have fueled volatility. Consumer confidence has also taken a hit, with the University of Michigan survey showing a sharp decline in sentiment and rising inflation expectations (4.3% vs. 3.3% last month).

President Trump’s decision to reignite a tariff war, targeting immigration and the fentanyl crisis, was sadly inevitable. With 25% tariffs on imports from Canada and Mexico and 10% on Chinese goods, the global economy faces fresh downside risks. These measures are expected to slow US GDP by 0.4% and push core inflation up by 0.7%, according to Goldman Sachs. The Fed’s recent cautionary tone suggests rate cuts are unlikely, even as markets still hope for a 50bps reduction in 2025.

The first week of Donald Trump’s presidency brought significant anticipation but limited immediate market impart. U.S. equities rose 1.5%, while the 10-year Treasury yield remained steady. Trump’s initial tariffs were less severe than expected, sparing China for now. However, concerns about rising consumer costs and tightening spending power continue to linger.