Two the Point — March Malaise or Spring Setup?

Despite growing policy uncertainty and softening sentiment, markets appear to be stabilizing as inflation data met expectations and the Federal Reserve remains patient. We continue to monitor labor market dynamics and tariff developments closely, with a focus on their implications for growth and pricing pressures.

Key Insights:

• The Fed held its policy rate at 4.25%–4.50%, with a unanimous decision and minimal forward guidance, citing increased uncertainty.
• Initial jobless claims came in at 223,000 last week, remaining historically low despite federal layoffs; continuing claims held steady.
• The Consumer Confidence Index fell to 92.9 in March, the fourth consecutive monthly decline, with the Expectations Index hitting a 12-year low.
• Housing starts rose +11.2% and existing home sales increased +4.2% month-over-month in February, while single-unit permits edged down -0.2%.
• February industrial production was +0.9% m/m, but the NY Fed manufacturing index plunged to -20.0 in March.
• Tariff risks remain in focus ahead of April 2nd, but the White House signaled a narrower and more targeted application, reducing near-term disruption risk.
• Despite volatility, the S&P 500 has historically rebounded in Q2, with a six-percentage-point average rally from March to late July over the past decade.