Uncertainty and volatility

Macroeconomic update for April 2025  

Over the past month, tariffs have become a key source of uncertainty as questions around their scope and scale, as well as their potential ripple effects on growth, earnings, and broader economic dynamics, remain largely unclear. Recent data from the Trade Policy Uncertainty Index tells a clear story: confusion around tariffs has spiked, even surpassing the levels seen during Donald Trump’s last presidency. This cloud of unpredictability is beginning to cast a shadow over both businesses and consumers. In February, US manufacturers reported sharp drops in new orders and hiring, raising red flags about a potential loss of economic momentum. Growth expectations have taken a hit, too. There’s now a growing sense that monetary policy will continue to ease, with investors now bracing for the possibility of further rate cuts as uncertainty deepens and confidence wavers. The CIO Monthly video breaks down the current situation.  

Key Takeaways

1. Tariffs in the limelight
   The uncertainty around tariffs is clearly weighing on confidence for both businesses and consumers.
   
   
2. Challenging macroeconomic environment 
   There is currently a notable gap between survey-based indicators (“soft data”) and actual economic figures “hard data”), complicating the interpretation of the economic outlook.
   
   
3. Constructive view on equities 
   Volatility may persist in the near term, particularly around tariff news, though barring any major impact on economic growth, we believe US stocks could very well recover once trade tensions peak.

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