It seems at least one of Trump’s economists is telling him that tariffs are a wonderful way of stimulating domestic growth and raising revenue for the government simultaneously. This is a protectionist’s dream. The problem with dreaming is that eventually one wakes up. Tariffs have never been a good idea and they still are not. The laws of economics are what they are; trying to fight them never works out well.
We limped to the finish but 2024 was still a good year. What does that mean for 2025? There is lots of talk about the low odds of the market having three big years in a row, but that is all talk; no one who has actually looked at the data would come to that conclusion.
What do these two unrelated stocks have in common? They are high-quality companies whose stocks were selling at what we deemed to be an attractive price. It did not matter that one was purchased when its stock price was going down, while the other was purchased when its stock price was going up; The price movement of the past has no bearing on whether the current price is a good value.
2024 has been a great year for the market: The economy has continued to grow faster than predicted; Inflation has slowly but surely gotten better; The elections are behind us, and there was a clear winner and no real protest. We enter the holiday season with a deep sigh of relief, but wondering, what now?
The Fed controls one rate, the overnight Fed Funds rate; all other interest rates are determined by the market, which is under no obligation to follow the Fed’s action. It has chosen not to do so this time because economic data has been strong. That positive economic data also confirms that the Fed didn’t need to lower rates in the first place.
