Economic Crosscurrents Weigh Down Growth Outlook
The macroeconomic landscape is undergoing a significant shift, marked by the following developments:
- Fear of tariffs has led to an increase in imports, resulting in a decreased trade deficit.
- The ISM Manufacturing New Orders index indicates a sharp decline in order volume post-tariff implementation.
- The Atlanta Fed GDPNow Nowcast projects an economic contraction due to surging imports and uncertainty surrounding tariffs.
- Job cuts have surged, with government layoffs leading all sectors in February, totaling over 62,000 cuts.
- The year-to-date job cuts have reached 221,812, the highest since 2009.
- The Federal Reserve's monetary policy remains stagnant, reacting to fiscal changes rather than proactively adjusting rates.
- The overall economic outlook is fragile, contributing to recent challenges for risk assets.