1Q 2025 Commentary: Gambit

Summary

• U.S. markets faced a challenging first quarter. U.S. large-cap stocks ended the quarter down 4%, while U.S. small-cap stocks declined by nearly 10%.
• The government is pursuing aggressive trade and fiscal policies, using tariffs and reducing wasteful spending to restructure federal debt—partly to support extending tax cuts.
• March saw a sharp drop in both investor and consumer sentiment, with tariff-related concerns cited as the key reason for growing uncertainty.
• The Trump administration is making a high-stakes economic gambit—betting that short- term pain from tariffs and tighter fiscal policies will yield long-term gains in deficit reduction, domestic manufacturing, and rebalanced global trade.

Read and download the commentary here.