Macro Observations

I think the episode with Colombia reinforces the idea that tariffs, at this point, are a leverage tool for the White House to get what it wants. But what if it weren’t? What if the goal of tariffs was entirely about reshoring? But is inflation inevitable whether tariffs are successful or not? Let me lay out the case in two different scenarios.

Investors are more than willing to ignore valuations in the near-term as long as the promise of long-term revenue and earnings growth is still intact. Once that goes away, the justification for higher multiples goes away too. There’s still some questions, however, around whether or not this is a genuine sea change within the AI space or it’s a violent, but ultimately short-term, reaction by the market.

The one consistent thing about the bond market over the past year has been volatility. Long story short, the market is having a tough time trying to figure out the path of the economy, the Fed and inflation. This seems to be a good time to review what we think we know and what that could mean for the rest of 2025.