Market Recap: Economic Growth Strong, Inflation Stays Elevated, Trump Imposes Tariffs

  • Home
  • Market Recaps
  • Market Recap: Economic Growth Strong, Inflation Stays Elevated, Trump Imposes Tariffs
Colombian Coffee

Market Recap: Economic Growth Strong, Inflation Stays Elevated, Trump Imposes Tariffs

SPY
S&P 500

Last Week: -0.45%
YTD: 2.69%
1 Year: 23.30%

DIA

Dow Jones Industrial Average

Last Week: -0.67%
YTD: 4.71%
1 Year: 7.20%

ONEQ
NASDAQ

Last Week: -0.68%
YTD: 1.49%
1 Year: 26.22

Russell 2000

Last Week: -0.12%
YTD: 2.50%
1 Year: 17.87

Large Growth

YTD: 1.97%
1 Year: 28.15

Large Value

YTD: 4.63%
1 Year: 18.55%

Economic Growth Strong But Under Forecast

Economic growth in the U.S. decelerated to a 2.3% annualized rate in Q4 2024, below the forecasted 2.5%, with strong consumer spending offsetting declines in trade and private investment. Despite inflationary pressures, household spending remained robust, rising by 4.2% and contributing to a full-year GDP increase of 2.8%. The Federal Reserve maintained a cautious stance on monetary policy after cutting interest rates by 1% during the final months of the year. Although inflation deceleration may have stalled, unemployment claims declined sharply, signaling ongoing resilience in the economy.

Inflation Stays Elevated

Inflation remained strong at the end of 2024, with the personal consumption expenditures (PCE) price index rising 2.6% year-over-year in December, surpassing the Fed’s 2% target. Core PCE, excluding food and energy, held steady at 2.8%, reflecting ongoing inflationary pressures despite stable monthly increases. The Federal Reserve paused interest rate adjustments after prior cuts, maintaining the current range of 4.25% to 4.5% as officials signaled caution until clearer signs of inflation decline emerge. Personal income rose 0.4%, while spending outpaced it at 0.7%, contributing to economic resilience amid elevated price levels.

Trump Imposes Tariffs With Key Trade Partners

President Trump imposed a 25% tariff on goods from Mexico and Canada and a 10% tariff on imports from China, with a lower 10% tariff on Canadian energy imports. Canada responded with retaliatory tariffs, while China announced plans to file a complaint with the World Trade Organization. U.S. automakers and major importers, including Constellation Brands and Chipotle, saw significant stock declines amid concerns about rising costs. Despite emerging trade war risks, the S&P 500 and Dow Jones closed January with gains, though investors remain cautious ahead of key earnings reports and labor market data.

  • Alex is a Certified Financial Planner™. He brings nearly a decade of experience working with individuals, families, and business owners. Prior to working for Base Wealth Management, Alex worked for Fidelity Investments and an independent wealth management firm in Venice, FL. Through many years of practice, he specializes in helping clients navigate their financial goals through comprehensive financial planning. He received his bachelor’s degree in economics from Texas A&M University.

    View all posts

Schedule a Consultation

"*" indicates required fields

This field is for validation purposes and should be left unchanged.

Register for our Open House event!

2022 Tax Document Information

As a Base Wealth Management client, you should receive your paper tax documents via mail in the coming weeks. Or, if you previously had an online account with Pershing’s NetX360, you should be able to access your 2022 tax documents through that portal. 

If not, or if you experience any issues, please reach out to Tim O’Brien (tim.obrien@intervestintl.com).

Get a FREE Solo 401(K) Guide

Simply submit your name and email to receive a PDF straight to your inbox.

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.
 *We protect your data and HATE spam.
 

Get a FREE Roth 457 Guide!

Simply submit your name and email to receive a PDF straight to your inbox.

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.
 *We protect your data and HATE spam.
 

Get a FREE Roth 401(K) Guide

Simply submit your name and email to receive a PDF straight to your inbox.

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.
 *We protect your data and HATE spam.
 

Get a FREE Solo 401(K) 2-Pager for FireFighters

Simply submit your name and email to receive a PDF straight to your inbox.

"*" indicates required fields

Name*
This field is for validation purposes and should be left unchanged.
 *We protect your data and HATE spam.
 

Get a FREE copy of Divorce the IRS

If you would like to request a physical copy of Divorce the IRS, please fill out the form below.

"*" indicates required fields

Name*
Address*
This field is for validation purposes and should be left unchanged.
 *This book is most suitable for households with $250K or more in investable assets.
 

OOPS!

You’ve stumbled across an element that isn’t quite ready for the web yet. We’re working on a lot of new features so stay tuned.

-The Base Wealth Team

Choose your advisor

Dan DiLascia

Sean Koscho

Kyle
Howell

Josh
Pisa