As of the week ending 4/4/2025, momentum has been accelerating to the downside.
There’s much noise around the new tariffs imposed on imports. One thing that is for sure is that everyone will potentially experience the short-term results. The first to feel the effects—immediately after the tariffs were announced—was the stock market.
A lot of opinions will be thrown around. Some groups will use the current market turmoil, as well as the effects Main Street will eventually experience, as a means to confuse anyone who’s not informed or hasn’t been paying attention for the past few years.
The first point worth noting is the fact that the Fed has been gradually trying to do what the current administration is apparently looking to do quickly—and that is to lower inflation. The Fed, economists, and talking heads alike have all been pointing out that in order to bring inflation down, there needs to be a recession as well as a reset in the markets.
Other points to consider are the results expected from imposing the tariffs, which include lowering interest rates in general—especially mortgage rates—building up a robust U.S.-based industrial sector, as well as other matters regarding security.
Whether it is the correct thing to do is something most common people can’t compute at the moment. Everyone paying attention to their investments—be it self-directed, 401(k), pension, etc.—is probably having a hard time digesting this precipitous repricing the market is going through.
One thing is almost certain: once the waters clear, it will be a great opportunity to re-accumulate equities. In the meantime, there’s not a lot to do but proceed with prudence and hold tight.
This article speaks to some of these points: “A 50% correction is probable.” Why this veteran stock trader is 100% in cash.