Tariffs and European news fuel volatility

Friday 14 March 2025

Investment Talks

   

Tariffs and European news fuel volatility

March 2025 | Recent market activity has been marked by increased volatility. In the US, this has been mainly driven by growing concerns about the trajectory of the US economy, particularly in light of the erratic statements from President Trump with regard to tariffs. Additionally, the latest economic data has been disappointing. Consequently, the market's expectations for US growth for the current year have been revised downwards. With near-term inflation still well above the Fed’s target and consumer expectations of rising inflation (primarily a function of tariffs), the Fed will likely be forced to hold rates higher for longer to ensure that inflation expectations stay anchored. But, through the course of this year, we believe it will be able to reduce interest rates.

01 |  Rising uncertainty regarding Trump’s policies, particularly the economic impact of tariffs, has increased in recent weeks, leading to further weakening in US equities.

02 | The US economy is slowing more rapidly than expected, as companies have been frontloading imports to discount higher tariffs, and policy uncertainty has dented consumer confidence.

03 | We believe the correction in areas of excessive valuations in the US equity market may continue, leading to a continuation of the recent rotation in favor of Europe and China. In bonds, we believe an active duration approach is key.

Tariffs and European news fuel volatility

Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of March 11, 2025. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product or service. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not indicative of future results. Amundi US is the US business of Amundi Asset Management.

RO ID# 4321862
©2025 Amundi Asset Management

Other news

2025 Muni Mkt Outlook
03/10/2025 Investment Talks

Municipal Market Outlook

Unlike the US Treasury curve, the tax-exempt curve remains significantly positively sloped, leading to elevated yields in core and longer-duration municipal strategies. The high yield municipal market, in our view, displays a potential opportunity to provide not only tax-efficient dividends, but also pockets of price appreciation found in select sectors and security themes. In general, we expect credit stability in 2025, with potential policy shifts creating both credit negatives and positives. Some of these policy impacts may be felt in port issuers: broadly applied tariffs could impact bottom lines; hands-off energy policy could benefit traditional energy-producing local agencies and states; and Medicaid and Medicare reimbursement eligibility rate shifts could negatively impact smaller regional health care systems.

IT-2025 forming coalition
02/28/2025 Investment Talks

Forming coalition will be easiest of next German chancellor's many challenges

Given the tensions that brought down the last German government, which was a three-party coalition, preference will be given to a two-party coalition to limit the amount of compromise necessary. The most likely coalition is between the CDU/CSU and the SPD.  The German economy, which was in recession for the second year running in 2024, is the weakest economy in the eurozone. Tightening financial conditions, rising energy prices and weakening foreign demand (particularly from China) explain the poor economic performance. Uncertainty over tariffs has been weighing on confidence and domestic demand since the start of the year. 

IT-2025 High Yield Outlook
01/10/2025 Investment Talks

January 2025 US High Yield Market Outlook & Positioning

Although full year 2024 returns for High Yield were strong and spreads tightened during the fourth quarter, fourth quarter returns were weak with losses in both October and December due to yield curve headwinds. While defaults have moderated over the last few months, Moody’s recently increased its year-end global speculative grade default by issuer forecast to 4.6% on weaker US employment. Moody’s also projects the global default rate by issuer count to decline steadily across 2025, reaching 2.7% by next November.

Untitled Document

Before investing, consider the product's investment objectives, risks, charges and expenses. Contact your financial professional or Amundi US for a prospectus or summary prospectus containing this information. Read it carefully. To obtain a free prospectus or summary prospectus and for information on any Pioneer fund, please download it from our  literature section.

Securities offered through Amundi Distributor US, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer mutual funds, Member   SIPC.   

Not FDIC insured | May lose value | No bank guarantee Amundi Asset Management US, Inc.  Form CRS         Amundi Distributor US, Inc.  Form CRS