Quick Update this week.
MACRO
The next M2 data point will be released next Tuesday.
If M2 continues to shrink, it could negatively affect the markets in the short term.
Inflation appears to be easing, with a March 2025 forecast at 2.46%.
The main wild card is tariffs, which are difficult to predict in terms of timing and impact on inflation.
In short, tariff-related inflation uncertainty could suggest a more cautious monetary policy, leading to less credit, slower growth, and softer earnings.
This scenario lowers expectations for S&P 500 multiples.
To improve market sentiment, we’d need a shift from a restrictive to a neutral or expansionary policy.
A weaker economy could force that shift, but nobody wants slower growth coupled with inflation—fueling “stagflation” fears.
For now, these concerns need time to resolve. Current data shows:
Inflation is declining.
Th…
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