DeepSeek Shakeup, New Trades & A Big Announcement

February 2, 2025 - Update

Weekly Market & Portfolio Update 🚀

MACRO: Inflation, M2 & the FED—What’s Next?

• M2 growth stalled in December 2024, signaling that the FED remains focused on inflation rather than easing monetary policy.

• Since April 2024, M2 had been expanding, but this pause raises concerns. A decline in M2 would be even worse—something to watch.

• Financial conditions are improving, as seen in the Chicago Fed National Financial Conditions Credit Subindex and looser bank lending standards.

• Inflation forecast for January 2025: 2.85% (slightly better than December’s 2.9%).

• GDP growth for Q1 2025: Expected at 2.9%, a healthy pace.

Bottom Line:

Macro conditions still favor stocks, but there’s little room for the market to handle a FED policy shift toward tightening. Right now, the FED isn’t restrictive or accommodative—we need inflation to keep trending lower for stocks to thrive.