As we move further into the year, the landscape continues to shift with tariffs, government reform, and economic trends. In this ever-changing environment, we wanted to present some data as you go about planning for the months ahead.
- Rising Recession Risks: FED Takes A Dovish Stance: Review of the March 2025 Federal Reserve monetary policy meeting by PGIM Economist, Tom Porcelli. Key takeaways from the meeting include an unchanged federal funds rate of 4.25–4.50% and greater uncertainty around economic growth and unemployment.
- Trump Tariff Tracker: Tariff policies are constantly evolving—the linked tool is a real-time tariff tracker. PGIM Fixed Income’s Q1 Market Outlook estimates that every 1% tariff increase could raise core inflation by 0.1% and reduce GDP by 0.13%.
- US Consumer Sentiment Plunges: Consumer sentiment dropped to a two-and-a-half year low, potentially signaling an inflection point in discretionary spending.
- CME FedWatch: The linked tool provides implied market expectations of the future path of policy rates. As of March 21st, the market anticipates between two to three 25 basis point rate cuts in the second half of 2025. Expected rate cuts will be contingent on the progress of inflation ahead of tariffs.
- Interest Rates: Treasury yields returned to pre-GFC levels, which was partially offset by credit spreads near multi-decade lows. As a result, current all-in borrowing costs remain within the long-term range.
Treasury Yields and BBB Public Credit Spreads
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April 8, 2025
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