May 2025 Market Update

In this May market update, Chief Investment Officer Brian Andrew, CFA®, discusses how ongoing tariff tensions and a growing federal deficit are weighing on markets and shaping fiscal conversations. With the Fed holding rates steady amid uncertainty, Merit is adjusting its strategy, favoring large-cap stocks, keeping bond maturities short, and incorporating alternatives to stay flexible in a shifting economic landscape.

Key Takeaways:

1. Trade and Fiscal Policy Are in the Spotlight
Ongoing tariff developments will continue to create volatility in markets. While fiscal policy can be stimulative in the near term, it will pressure markets as the deficit grows.

2. The Fed Stays Cautious
Despite political pressure, the Federal Reserve is holding interest rates steady as it waits to see how inflation and economic growth unfold.

3. Adapting Portfolio Strategy Amid Uncertainty
Merit is responding to today’s shifting environment by favoring large-cap companies with strong balance sheets and cash flow generation, shortening bond maturities, and exploring alternative investments.

We hope you find this video both informative and insightful. For any questions, please reach out to your Merit financial advisor.

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