Two the Point — Macro Signals Amid Market Volatility

Markets remain unsettled as new tariff announcements and evolving economic data reshape the investment landscape. In this week’s update, we highlight the latest macro signals and emphasize the importance of resilience and long-term perspective in navigating volatility.

Key Insights:

• March Payrolls: U.S. nonfarm payrolls rose +228,000; the unemployment rate edged up to 4.2%, suggesting a resilient but softening labor market.
• Credit Markets: High yield credit spreads widened to approximately 450 basis points, indicating rising investor caution.
• Recession Risk: Early estimates suggest that the originally announced tariffs, which would raise the U.S. rate to 22.5%, could reduce 2025 GDP by approximately 1-1.5%.
• Inflation Dynamics: Tariffs are expected to add +2.5% to near-term core inflation, though longer-term risks tilt toward slower growth.
• Investor Sentiment: With 62% of U.S. households owning equities, consumer spending remains sensitive to stock market volatility.
• Strategic Focus: Maintaining quality, liquidity, and diversified exposures remains key as conditions evolve.