Dear Valued Client,
With recent market turbulence top of mind, we want to take this opportunity to share our thoughts on market volatility, what history can tell us, and our outlook moving forward.
The S&P 500 and Nasdaq have both experienced notable declines since their record highs on February 19th. However, history shows that once markets gain clarity, they can rebound sharply and unexpectedly.
Given that we do not see an imminent risk of recession, as we will outline below, we expect the market to recover quickly once greater certainty emerges on inflation trends, Federal Reserve policy, and tariffs.
Recent market swings have been largely driven by headlines, particularly surrounding trade policy. On March 4, President Trump implemented a 25% tariff on imports from Canada and Mexico and increased tariffs on Chinese goods from 10% to 20%. Most recently, Trump has threatened a potential 200% tariff on European alcohol imports.
Since these new dynamics are still unfolding, the uncertainty surrounding potential retaliatory measures from affected countries only adds to the unpredictability in global trade relations.
Beyond trade risks, the key concern is how these tariffs will impact inflation at a time when the Federal Reserve is already walking a metaphorical tightrope to balance inflationary pressure and economic growth. Higher import costs from tariffs could push inflation higher, as businesses may pass costs onto consumers. This could force the Fed into a difficult position as it balances the need to control inflation without tightening financial conditions too aggressively. The Federal Reserve’s decision last month to hold rates steady, despite inflation rising from 2.4% in September to 3% in January, is adding to investor uncertainty. With inflationary pressures persisting and the economy facing potential external shocks from tariffs and trade disputes, the Fed’s lack of clear forward guidance has left markets unsure of the central bank’s next move. Investors will gain more certainty at the next Fed meeting scheduled for March 19th…
To continue reading, please download the full Moran Monthly Digest here.
Moran Monthly Digest: March 2025
Dear Valued Client,
With recent market turbulence top of mind, we want to take this opportunity to share our thoughts on market volatility, what history can tell us, and our outlook moving forward.
The S&P 500 and Nasdaq have both experienced notable declines since their record highs on February 19th. However, history shows that once markets gain clarity, they can rebound sharply and unexpectedly.
Given that we do not see an imminent risk of recession, as we will outline below, we expect the market to recover quickly once greater certainty emerges on inflation trends, Federal Reserve policy, and tariffs.
Recent market swings have been largely driven by headlines, particularly surrounding trade policy. On March 4, President Trump implemented a 25% tariff on imports from Canada and Mexico and increased tariffs on Chinese goods from 10% to 20%. Most recently, Trump has threatened a potential 200% tariff on European alcohol imports.
Since these new dynamics are still unfolding, the uncertainty surrounding potential retaliatory measures from affected countries only adds to the unpredictability in global trade relations.
Beyond trade risks, the key concern is how these tariffs will impact inflation at a time when the Federal Reserve is already walking a metaphorical tightrope to balance inflationary pressure and economic growth. Higher import costs from tariffs could push inflation higher, as businesses may pass costs onto consumers. This could force the Fed into a difficult position as it balances the need to control inflation without tightening financial conditions too aggressively. The Federal Reserve’s decision last month to hold rates steady, despite inflation rising from 2.4% in September to 3% in January, is adding to investor uncertainty. With inflationary pressures persisting and the economy facing potential external shocks from tariffs and trade disputes, the Fed’s lack of clear forward guidance has left markets unsure of the central bank’s next move. Investors will gain more certainty at the next Fed meeting scheduled for March 19th…
To continue reading, please download the full Moran Monthly Digest here.
This commentary is for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any securities. The views expressed are those of the author(s) as of the date of publication and are subject to change without notice. Past performance is not indicative of future results.
This material may have been prepared using data and analysis from a variety of sources, including but not limited to: Bloomberg, FactSet, Morningstar, S&P Global, Moody’s, Refinitiv, Capital IQ, CRSP, FRED, IMF, World Bank, OECD, and other third-party research providers. Additionally, portions of this content may have been generated or reviewed with the assistance of artificial intelligence tools, including OpenAI’s large language models or similar technologies. While we believe these sources to be reliable, we do not guarantee their accuracy or completeness.
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