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.
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.
