#MarketPullback

market pull back trends contributed by several key factors, including trade policy uncertainty, Federal Reserve actions, and shifting investor sentiment. Here’s a detailed analysis of the situation and what investors might consider:

### **Key Drivers of the 2025 Market Pullback**

1. **Trade War and Tariff Uncertainty**

- President Trump’s aggressive tariff policies, particularly on Chinese imports, have injected volatility into markets. The Wolters Kluwer Economic Indicators survey notes a 63% probability of "stagflation-lite" due to higher inflation and slowed growth from tariffs .

- The S&P 500 has dropped ~10% YTD as businesses face higher costs and reduced profitability, leading to market instability .

2. **Federal Reserve Policy Shifts**

- The Fed has paused further rate cuts after reducing rates by 1% in late 2024, citing persistent inflation risks. This has dampened expectations for monetary easing, which previously supported equity markets .