May 2025 Economic Review
April was marked by significant economic upheaval, primarily driven by the U.S. administration’s aggressive trade policies.
On April 2, President Trump announced sweeping “reciprocal tariffs” on imports from nearly every U.S. trading partner, calling the day “Liberation Day.” These tariffs ranged from 10% to 49%, with notable levies such as 34% on Chinese goods and 20% on European Union imports. A 25% tariff on all imported automobiles was also introduced, with Canada and Mexico notably exempted. The announcement led to immediate declines in U.S. stock futures and raised concerns about potential inflation and recession risks.
The financial markets reacted swiftly. The S&P 500 and Dow Jones Industrial Average experienced significant losses in the days following the announcement, with the S&P 500 dropping over 10% in two days, marking one of the worst weeks since the COVID-19 recession of 2020.
The global economic outlook dimmed as well. The International Monetary Fund reduced its global growth forecast for 2025 to 2.8%, down from 3.3% in January, citing the escalation of trade tensions and high levels of policy uncertainty. The U.S. growth forecast was also cut to 1.8%, with a 40% chance of a U.S. recession this year.
Despite the turmoil, the U.S. labor market showed resilience. The April jobs report indicated that the economy added 177,000 jobs, underscoring the labor market’s strength and beating expectations of 138,000. Additionally, the U.S. services sector expanded in April, with the Institute for Supply Management’s services index rising to 51.6%, indicating growth in the sector.
Internationally, India emerged as a bright spot, topping global Purchasing Managers’ Index rankings in both manufacturing and services, reflecting robust economic momentum.
In summary, April was a month of significant economic disruption, driven by aggressive U.S. trade policies that led to market volatility and a dampened global growth outlook. However, pockets of resilience, such as the U.S. labor market and India’s economic performance, provided some optimism amid the volatile outlook.
Current Economic Releases |
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| Data | Period | Value | |
| GDP QoQ | Q1 ’25 | -0.30% | |
| U.S. Unemployment | Apr ’25 | 4.20% | |
| ISM Manufacturing | Apr ’25 | 48.7 | |
| PPI YoY | Mar ’25 | 2.70% | |
| CPI YoY | Apr ’25 | 2.30% | |
| Fed Funds Target | May 13, 2025 | 4.25% – 4.50% | |
Treasury Yields |
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| Maturity | 5/12/25 | 4/11/25 | CHANGE |
| 3-Month | 4.379% | 4.310% | 0.069% |
| 6-Month | 4.245% | 4.182% | 0.063% |
| 1-Year | 4.115% | 4.016% | 0.099% |
| 2-Year | 4.010% | 3.960% | 0.050% |
| 3-Year | 4.007% | 4.007% | 0.000% |
| 5-Year | 4.110% | 4.160% | -0.050% |
| 10-Year | 4.471% | 4.490% | -0.019% |
| 30-Year | 4.905% | 4.870% | 0.035% |
Agency Yields |
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| Maturity | 5/12/25 | 4/11/25 | CHANGE |
| 3-Month | 4.190% | 4.140% | 0.050% |
| 6-Month | 4.120% | 3.970% | 0.150% |
| 1-Year | 3.910% | 3.710% | 0.200% |
| 2-Year | 4.046% | 4.044% | 0.002% |
| 3-Year | 4.039% | 4.064% | -0.025% |
| 5-Year | 4.166% | 4.229% | -0.063% |
Commercial Paper (A1/P1) |
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| Maturity | 5/12/25 | 4/11/25 | CHANGE |
| 1-Month | 4.320% | 4.370% | -0.050% |
| 3-Month | 4.430% | 4.390% | 0.040% |
| 6-Month | 4.410% | 4.330% | 0.080% |
| 9-Month | 4.400% | 4.250% | 0.150% |
Source: Bloomberg. Data as of May 13, 2025. Data unaudited. Many factors affect performance including changes in market conditions and interest rates and in response to other economic, political, or financial developments. Investment involves risk including the possible loss of principal. No assurance can be given that the performance objectives of a given strategy will be achieved. All comments and discussions presented are purely based on opinion and assumptions, not fact. These assumptions may or may not be correct based on foreseen and unforeseen events. The information presented should not be used in making any investment decisions. This material is not a recommendation to buy, sell, implement, or change any securities or investment strategy, function, or process. Any financial and/or investment decision should be made only after considerable research, consideration, and involvement with an experienced professional engaged for the specific purpose. Past performance is not an indication of future performance. Any financial and/or investment decision may incur losses.