The Return of Volatility: An Economic Recap of Trump’s First 100-Days

As we’ve discussed in the past, the financial markets are ruled by emotion over logic. The dramatic repositioning of economic policy has tapped in the emotional center of investors—for better or worse. 

In this article, we’ll try to summarize some of the changes over the past three months, the most recent tariff impacts, and how some inventors are seeking to hedge volatility. 

Economic Shifts Under the Current Administration

Trump’s first 90 days in office was marked with extreme volatility as his administration rapidly instituted new economic policies and cut funding for a vast array of government services and grants. While the legality of these changes are still being debated among Congress and the Judiciary, they have no doubt had a significant impact on the economy.

Let’s recap some of the shifts:

• Mass firings of federal workers, including in the Park Service, USDA, and other key agencies
• Institution of tariffs on allies like Canada and Mexico (and the threat of tariffs—since the market also changes on emotional implications)
• Continued inflation and price squeezes, with an updated inflation forecast  from the Organization for Economic Co-operation and Development (OECD) for 2025 being 2.8%
• High costs of housing and groceries persist
• Funding cuts at USAID, NHS, and similar agencies that provide nonprofits, universities, and schools with grants
• Cuts to the VA and the Social Security Office
• Consumer dropped 0.2% in January, and analysts are concerned that consumer spending may continue to be low
• A dramatic rise in the 10-year Treasury rate, a common indicator of recession and economic stability, due to tariffs. 

All of these items have had an adverse impact on the market, creating financial anxieties among investors. This can cause them to withdraw funds from the market without thinking about their long-term strategy, furthering potential decline. 

Tariff Games

One of the biggest impacts on the economy has been the one word everyone keeps talking about: Tariffs. The current administration’s decision to implement tariffs across the board, followed by a 90-day pause, upended the current economic outlook. And for good reasons: Tariffs were raised from around 2% to 3% to an average of 30% across over 50 countries. 

For most Americans, much of the anxiety has resulted in a tumultuous stock market—dramatically affecting retirement accounts. But another major concern is that of a recession. Analysts are now suggesting that risks of a recession this year may be as high as 60%.

Overwhelmingly, the view of tariffs leans negative. For the average American household, this means less purchasing power, as the Tax Foundation predicts these tariffs will amount to $1,280 more in taxes. The Budget Lab found that the April 2nd tariffs alone negatively impacted the GDP growth in 2025, already shrinking the US economy. Already, Americans are feeling prices increase on apparel, cars, and food. 

Furthermore, there is much skepticism about growth stemming from tariffs. A study of the 2018-2019 tariffs found that there was no significant impact in employment in newly-protected sectors, with a negative impact on employment in agriculture.

At the same time, a JPMorgan analyst describes the tariffs as a "sledgehammer" but not the only action negatively affecting the marketing. 

That said, there is clearly a lot of uncertainty and anxiety around the tariff implementation. The 90-day pause appears to be a stop-gap.

Decoding the Volatility 

So, what could fundamentals look like during the current presidency?

To avoid volatility, it could be worth it to look outside of the United States for investments. For example, fund manager GMO has openly discussed its decision to go heavy with its investments in Japan. Others, however, look to emerging markets outside of the typical names. Instead of India, for example, which may still be affected by potential trade wars with China, some funds are looking to lesser-known countries like Ghana, Kenya, and Kazakhstan—countries that are likely to benefit or remain the same in case of a trade war.

Historically, fixed income options have been popular choices during uncertain times. However, new risks introduced by Elon Musk accessing Treasury data has led some investors to pull away from I-bonds. CDs may still be a stable option so long as the administration does not lower interest rates. However, increased risks may apply if the administration follows through with its decision to reduce regulations on banks. De-regulation increases the risk of bank failures and economic collapse, which can also affect CD stability. 

Index funds or bonds that focus on stable or emerging markets outside of the US and its allies may be one of the best options for those looking at fundamentals and resilience during this time. 

In other words: There are options. There are still risks associated with those options, and they will not work for every portfolio. Your portfolio should be tailored to your specific needs and goals—and that is something to discuss with an advisor. 

Reviewing your portfolio

The next step for any individual is to review their financial and retirement plans. In this environment, it isn’t easy. But it’s possible to develop a primary and secondary plan to help build resilience in your financial situation.

If you are looking for a second opinion from an objective fiduciary advisor, book a call with me today. I’d be happy to help.