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Tariff Talk, Uncertainty, and Spring

Writer: Doug MacGrayDoug MacGray
2 days ago4 min read

March 30, 2025


PCE DATA DOESN'T HELP: The Fed's preferred inflation metric is the Personal Consumption Expenditures (PCE) index. It increased by 0.3% in February, keeping the annual figure at 2.5%. The core PCE that excludes food and energy increased by 0.4%, and the annual number rose slightly from 2.7% to 2.8%. This merely shows that inflation is hanging in there, and it certainly was not enough to show a continuing downward trend, more like a hovering trend. The fact that the Fed's preferred metric, the core PCE Index, rose put investors in a negative mood.


TARIFF TALK: It is very difficult to keep up with the tariff talk and the actual tariffs. What are threats and posturing, and what is real? The uncertainty contributes to volatility in the stock market. There is a proposed tariff of 200% on imports of various alcoholic beverages from the European Union countries. There is a 10% tariff that has been imposed on Chinese imports and plans to impose a 25% tariff on products from Canada and Mexico. A month ago, a tariff of 25% was announced on aluminum, copper, lumber, and steel. As I write this, the UK and the US are in talks to reach a last-minute, post Brexit trade deal to avoid or mitigate tariffs. On Friday, the leaders of the U.S. and Canada spoke and agreed to negotiate trade and security agreements. What will be the end result of all the tariff and trade talk? No one knows, but in the meantime, it causes uncertainty and consternation.


BACK IN RED: The PCE inflation number was slightly higher than expected (see above), consumer sentiment is down (see below), and tariff talk (see above) continues to haunt the markets. As a result, another week of ups and downs, ending down. As you can see below, diversification is helping this year. The S&P 500 and other U.S. stock indices are struggling, but bonds and international stocks are positive.



LONGER-TERM PERFORMANCE: Below are the annualized three-year and five-year numbers for these same indices.



CONSUMER SENTIMENT DECREASES: According to the University of Michigan's monthly consumer sentiment index, U.S. consumers negative feelings are at the lowest level since 2022. Two thirds of consumers expect higher unemployment in the next year, the highest that reading has been since 2009. Anxiety about tariffs, federal layoffs, and a gradual weakening of the labor market is causing the drop in sentiment.


PERSONAL INCOME INCREASES: According to the Bureau of Economic Analysis, personal income rose 0.8% in February. The average savings rate was 4.6% for the month. Did you save 4.6% of your income?


UNEMPLOYMENT CLAIM DATA REMAINS STATIC: Weekly new unemployment filings remain in the same range they have been in the past few years. In the week that ended March 22, 224,000 such claims were filed, a slight decrease from the prior week, and the 4-week moving average decreased by nearly 5,000 to 224,000.



MIDDLE CLASS: How much income do you need to be middle class in the United States. According to an analysis by SmartAsset, median household income in the U.S. is $75,000. But as we all know, different places have different costs of living. So, in what state do you need the most income to be considered middle class? In my native state of Massachusetts, you need between $66,565 to $199,716 to be middle class. Rounding out the top ten are New Jersey, Maryland, New Hampshire, California, Hawaii, Washington, Utah, Colorado, and Connecticut. Delaware comes in at 16th where you need between $54,000 and $164,000. Pennsylvania comes in at 28th where you need between $49,211 and $147,648. The cheapest state is Mississippi where you need between $36,132 and $108,405 to be middle class according to SmartAsset.


STONECROP ON CABLE TV!: One of Stonecrop's advisors, my colleague Jessica Chominski, was recently asked to be on a panel for a show on EWTN (a Catholic cable outlet) called "Catholic Sphere." She is one of three panelists speaking on the topic of family financial issues for members of the Catholic faith. You can view by clicking on Jessica's picture below.


SUDDEN ARRIVAL OF SPRING: All of a sudden, on Saturday it reach 80 degrees. Everything began to bloom! And in the morning, as I sat in my sunroom, this little guy was staring me down.



Have a great week!


Our purpose is to honor God by helping our clients see the objective, find the path, and navigate past the obstacles to a more prosperous future.



Douglas R. MacGray, J.D., C.F.P. ®

President

Stonecrop Wealth Advisors, LLC

Direct | Cell | Fax

(610) 628 4545



"You have power over your mind - not outside events. Realize this, and you will find strength." Marcus Aurelius


"The wealth of the rich is their fortified city. They imagine it a wall too high to scale." Proverbs 18:11 (NIV)


SOURCES:

TARIFF TALK: https://www.wsj.com/politics/policy/the-trump-tracker-what-the-president-has-done-so-far-a30c92e2?mod=trump-100 AND https://www.msn.com/en-gb/money/other/uk-dreams-of-us-trade-deal-before-trump-tariffs/ar-AA1BSxTs AND https://www.upi.com/Top_News/US/2025/03/29/trump-carney-talk-tariffs/5571743276738/

UNEMPLOYMENT CLAIM DATA REMAINS STATIC: https://www.dol.gov/ui/data.pdf


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Investment advisory services offered through Stonecrop Wealth Advisors, LLC, a Registered Investment Advisor with the U.S. Securities and Exchange Commission.


SDG

*S&P 500: This is a measure of the performance of the 500 largest companies in the United States, and it a common index to track the performance of U.S. equity markets, especially the large cap markets.

*MSCI All Country World Index X US: This is a broad measure of the performance of worldwide equity markets excluding the United States.

*Bloomberg U.S. Aggregate: This is a measure of the U.S. bond markets.

 
 
 

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