The stock market experienced a relief rally to start the week, and attempted to keep the comeback going on Tuesday morning, as comments from the Trump economic team over the weekend suggested a softer stance on tariffs. But within the boardroom, hope is not likely to replace caution any time soon.

Many executives in the C-suite and across the economy remain disturbed about the trade war outlook and a White House that has given every indication it is ideologically committed to a major change in global economic policy. Shifting messages from President Trump that continue to add confusion to the tariff planning process haven’t helped.

In a word, the “pessimism” has crept back in where the animal spirits had been after Trump’s election. That’s one way to sum up the results from the latest CNBC CFO Council quarterly survey for Q1 2025. While some chief financial officers said Trump is doing what he promised on the campaign trail, many CFOs said the way he is going about delivering on his agenda is not what was expected. 

“Too chaotic for business to navigate effectively” was how one CFO respondent framed their view of Trump’s second term to date. 
 
“Extreme”; “Disruptive”; “Aggressive”; “A wild ride,” were some of the other ways CFOs portrayed their current view. 

It all adds up to a majority of CFOs (60%) saying they expect a recession in the second half of the year – another 15% say a recession will hit in 2026.

Just a quarter ago, when the recession question in the quarterly survey was laid on the Fed rather than Trump – in the Q4 2024 survey, we asked whether the central bank’s efforts to tame inflation would lead to an economic slump – only 7% of CFOs said they thought that was on the calendar for 2025. 

In recent weeks, recession has become a more popular default setting in the market, for the first time since the Fed began aggressively raising interest rates to beat back runaway inflation in March 2022. The odds of recession are running as high as 50% at some financial firms, new “recession watch” indicators are being created, and other recent CNBC surveying, among money managers and economists, shows a spike in recession fears.

The CFO Council survey is a sampling of views from chief financial officers at large organizations across sectors of the U.S. economy, with 20 respondents included the Q1 survey conducted between March 10 and March 21.

U.S. trade policy is the primary reason for the new economic downturn base case. It is now being cited as the top external business risk by CFOs, at 30%, followed by the related risks: inflation (25%) and consumer demand (20%), with the latest reading on consumer confidence in income, business and job prospects hitting a 12-year low. 

Ninety percent of CFOs say tariffs will cause “resurgent inflation,” and as CFOs worry more about prices, expectations for when the Fed can engineer it back down to 2% in keeping with its dual mandate keep getting pushed further out. Despite Fed Chair Jerome Powell himself holding out hopes that any tariffs inflation may be “transitory,” half of CFOs now say that the 2% target inflation rate will not be achieved until either the second half of 2026 or 2027.  

Pressure on U.S. treasury bond yields is expected to remain, with 65% of CFOs saying the range will still be between 4% and 5% at the end of 2025 (50% of CFOs expect yields to stay within the lower end of this range, between 4% and 4.5%, where 10-year treasury are today).

As industries look to the White House for tariff exemption deals molded in their own self-interest, the general level of economic and market uncertainty among business executives across sectors was registered in one unusual way in the quarterly survey. Typically, when asked to name the stock market sector that will do the best over the next six months, CFOs choose tech, health care or energy. In the history of the survey, the responses to this question rarely deviate from those three sectors. This quarter, though, the majority CFO opinion on the sector with the best growth prospects was, “Don’t know.” 

Few CFOs think the bull market will quickly resume its march upwards, with 90% of respondents saying the Dow Jones Industrial Average will retest 40,000 before ever reaching 50,000, which indicates the potential for several thousand points more in the index lost.

In a more key, core way, the cautious corporate view was evident in the change quarter over quarter with respect to spending plans, with the number of CFOs who say their firm plans to increase capex this year declining from Q4. It was not a precipitous decline (roughly 10%), but it is trending in the wrong direction. The largest share of respondents expect spending to remain in line with the recent trend at their companies (45%), and even as it declines as a budget stance, there are still more who expect an increase (35%) in spending than a decrease (20%).  

Overall, 95% of CFOs said policy uncertainty is having an impact on their business decision-making. 

The most acute way that rising pessimism was registered in the survey was simply by asking CFOs what they think of the economy: 75% of respondents said they are “somewhat pessimistic about the overall state of the U.S. economy” right now. And that’s despite 75% being optimistic about the state of their own industry.  

The good news if a recession is in the cards? Ninety percent of CFOs think it will either be moderate (50%) or mild (40%).  

But CFOs remain divided on where it is all leading, measuring a mix of diminished hopes and bleak confusion. 

“I feel the current administration is seeing how far they can push before anything breaks. I am hopefully after the first 100 days that things will moderate,” said one CFO. 

But another CFO responding to the survey concluded, “Complete chaos, without an end game strategy.” 

Read the full article HERE.

Critics will tell a hearing on Monday that the move against commercial ships could be more disruptive for global trade than Trump’s tariffs.

For a symbol of the chaos engulfing world trade since the Trump administration walked into the White House, look no further than a pile of 16,000 metric tons of steel pipes. Stevedores in Germany should be preparing to load the first batch on a container ship bound for a massive energy project in Louisiana. Instead the cargo is sitting in a German warehouse after Washington proposed putting million-dollar levies on Chinese ships docking in the US.

Talks over the terms for shipping the pipes were put on hold until there’s more clarity, said Jose Severin, a business development manager for Mercury Group, the logistics provider for the deal. For that particular route across the Atlantic, 80% of the ship owner’s vessels were built in China, meaning a shipment would be subject to a surcharge of between $1 million and $3 million. Depending on how the measure is applied, that could amount to double or triple the current cost of shipping the steel pipes from Germany.

It’s one of countless deals caught in the crossfire sparked by a proposal from the Office of the US Trade Representative aimed at curbing China’s dominance of the shipbuilding, logistics and maritime industry. China now produces more than half of the world’s cargo ships by tonnage, up from just 5% in 1999, according to the USTR, with Japan and South Korea the other shipbuilding powers. Last year US shipyards built just 0.01%, and the USTR has an eye on reviving the fortunes of the long dormant US merchant shipbuilding industry.

China’s dominance gives it “market power over global supply, pricing, and access,” the USTR said on Feb. 21 when it unveiled the proposal. In response, the China State Shipbuilding Corp., which has the largest order book of any shipbuilding group in the world, described the measures as a breach of World Trade Organization rules.

The subject will be at the heart of a two-day USTR hearing in Washington that opened on Monday. The entire supply chain will be represented, from soybean growers to shippers to Chinese shipbuilders. Dozens of business owners and trade groups will explain why they fear the proposals would disrupt global trade more than President Donald Trump’s approach to tariffs.

“They see this as more of a threat than the tariffs, because of the impact it’s going to have on the supply chain,” said Jonathan Gold, vice president of supply chains and customs policy at the National Retail Federation. “Carriers have said they’re not only going to pass along the cost, but they’re going to pull out of certain rotations, so the smaller ports, Oakland, maybe Charleston, Delaware, Philly. They’re all going to suffer as a result.”

In letters to the USTR and interviews with Bloomberg News ahead of the hearing, business owners and industry officials said the proposals don’t make sense if the goal is to revive the domestic shipbuilding industry, and would potentially be devastating for the US economy. They argue it would make American goods too expensive internationally, divert trade away from US regional hubs to Canada and Mexico, overwhelm major US ports, and force up global freight rates and inflation at home.

The levies could theoretically generate between $40 billion and $52 billion for US coffers, according to Clarksons Research Services Ltd., a unit of the world’s largest shipbroker. But, already roiled by uncertainty over the escalating tariffs on Chinese goods, steel and aluminum, and with a fresh round of reciprocal measures expected on April 2, some American companies and others in the industry are anxious.

“What the USTR has proposed — a backward-looking, retrospective, multi-million dollar per port call fee — won’t work,” said Joe Kramek, chief executive officer of the World Shipping Council, who is set to testify on Monday. “It will only serve to penalize US consumers, businesses, and especially farmers, raising prices and threatening jobs.”

John McCown, a veteran of the maritime transportation industry and author of a history of cargo shipping, put it more starkly: “If you wanted to take a sledgehammer to trade this is what you would do. You take it all together — it’s like an apocalypse for trade.”

‘Make Shipping Great Again’

The USTR investigation began last year under the Biden administration after a request from five major labor unions. The resulting report, delivered just days before Trump was inaugurated in January, determined that China had targeted the global maritime sector to dominate it. It left it to the new administration to come up with ways to address Beijing’s commanding position.

The imposition of levies and additional export requirements are designed “to create leverage to obtain the elimination of China’s targeting of these sectors for dominance,” according to the initial proposals issued by the USTR on Feb. 21. Firms would be penalized using a formula based on their fleet’s existing share of Chinese-built ships, as well as others on order. Some vessels could attract fees of up to $3.5 million per port call if they are Chinese-built with a Chinese operator which also has a ship on order from a Chinese manufacturer, according to Clarksons.

An estimated 83% of container ship visits to the US last year would have been hit with fines under the proposed rules, as well as two-thirds of car-carrier calls and nearly a third of crude tankers, according to Clarksons.

The proposal also requires a share of US products — including agricultural, chemical, energy and consumer goods — to move on US-flagged, crewed, and built ships in coming years.

Many carriers and operators say they would happily buy or hire US-built merchant ships, but that it would take decades for US shipyards to meet capacity demands and there’s already a shortage of American mariners. At the same time, the port fees would punish carriers for investments they’ve already made in Chinese-built ships.

When Atlantic Container Line AB, which carries more than half of US exports of construction and agricultural equipment to Europe, needed to source “container-roll-on-roll-off” vessels in 2012, Japanese and Korean shipyards wouldn’t build just five of the specialized ships. American shipyards said they wouldn’t be able to deliver them for at least seven years, wrote CEO Andrew Abbott in a submission to the USTR. Instead ACL found ships in China, where they could get the vessels quickly and at a “competitive price.”

“The proposed action will put us out of business for a commercial decision taken 13 years ago,” wrote Abbott of the USTR proposal, “at a time when US shipyards were flush with US Navy orders and could not build our vessels, and when the Chinese shipbuilding industry was a minor player in the world.”

Many of the commenters expressed support for curbing China’s maritime might, while urging the USTR to rethink its approach. There were, however, a handful of comments in support of the proposed measures among the more than 250 submissions.

“China’s unfair production practices have made it impossible for American shipbuilders to compete on an even playing field,” said Scott Paul, president of the Alliance for American Manufacturing, who is scheduled to testify on Monday. “If fully implemented, these remedies will help to restore American economic security, push back against China’s unfair trade practices, and revitalize shipbuilding in America.”

Several industry executives believe the proposal is likely to be watered down given how disruptive it would be to world trade. Adjustments to the fees and export requirements could certainly be made. They could even be scrapped, given the mercurial character of some administration decisions. Yet, industry lobby groups insist there is good reason to think at least some of this will stick.

The idea of restoring a US shipbuilding industry to firm up US influence at sea has captivated Trump and fits with his wider push for a return to the halcyon days of US manufacturing. He has already staffed a new maritime directorate office inside the National Security Council.

Across Washington, the maritime sector is now cast as an essential pillar of national security, a shift that is still gaining momentum.

The USTR investigation echoes elements of a bipartisan bill introduced in December to address a shortage of merchant mariners using expanded training programs and tax incentives for companies looking to invest in US shipbuilding. The USTR proposal also shares some DNA with a draft executive order seen by Bloomberg that would funnel tariff or tax revenue to a fund to support the domestic shipbuilding industry.

The draft document — “Make Shipbuilding Great Again” — also suggests that the US will pressure other countries to align against China’s maritime dominance, or face retaliation. The White House didn’t respond to a request for comment about the draft executive order.

Major carriers have said they could adapt to the fees by skipping smaller ports along US routes, which might potentially damage local economies and specific industries that rely on them. Operators of container ships discharging at one port might be able to share the cost across thousands of containers, minimizing their exposure. But million-dollar plus fees for each port call could devastate smaller operators, as well as low-margin agricultural and commodities exporters reliant on smaller ports like Oakland or Charleston.

“It’s going to be immensely economically harmful,” said Philip Luck, economics director at the Center for Strategic and International Studies. “It’s not going to address the basic challenge they said they want to solve: increasing capacity of the US shipbuilding industry.”

“If it’s a pure security issue,” he added, “we should be incentivizing investment by allies like South Korea, Japan and Finland, who are very good at building ships.”

Two-Tier Shipping

The shipping sector has recent experience of the chaos that Washington’s scrutiny of China can bring. After the US Department of Defense blacklisted China’s largest shipping line Cosco Shipping Holdings Co. in January, over alleged links with the People’s Liberation Army, some shipbrokers were asked not to offer Cosco’s vessels for charter, according to people familiar with the matter. The suspension was lifted after a few days when it became clear that the blacklist would not impact charterers of Cosco’s ships financially or legally.

If the USTR implements its proposal as written, shipping executives and brokers say a gradual split of the market is likely, where China-built ships are treated differently to those constructed elsewhere. In the tanker market where China-built vessels make up a third of all ships, it already appears to be happening. Charterers are starting to shy away from leasing China-linked tankers for long-term engagements, according to shipbrokers, because they expect that the vessels will need to call at US ports in the future, exposing them to tariffs.

Shipowners keen to expand their fleet while avoiding the penalties would also find themselves in a bind. Yards are near capacity in South Korea and Japan with the next slot for new ship orders only available around 2028, shipbrokers said. But not acquiring new ships at a time when the age of the global fleet is rising means that they would be stuck with deteriorating vessels.

Jose Severin will watch the outcome of the USTR decision — which is expected in the coming weeks — closely. A lack of domestic supply means those 16,000 metric tons of steel pipes are still needed for the Louisiana project, “it still needs to happen,” he added.

Read the full article HERE.

The Federal Reserve on Wednesday painted a picture of an economy reshaped dramatically by President Donald Trump and his economic policy. It warned that tariffs could significantly dampen the economic outlook, ushering in higher inflation and slower growth. That sparked concerns about the dreaded “stagflation,” an economic curse that is hard to escape.

Eager to soothe worried investors, businesses and consumers, the Fed urged caution about getting too worked up about its forecast, noting that inflation caused by tariffs may not be long lasting. Nevertheless, there’s no cocktail a central banker hates more than high unemployment mixed with high inflation.

While Wall Street was already starting to sound the alarm about stagflation, Fed Chair Jerome Powell has remained relatively sanguine. That held true at Wednesday’s post-meeting press conference.

But many market observers felt Fed officials’ new economic forecasts nevertheless gave off whiffs of stagflation.

According to officials’ latest median estimates, the US unemployment rate may hit 4.4% by year’s end. Inflation, as measured by the Personal Consumption Expenditures price index, could rise to 2.7%.

That’s an uptick from the 4.3% unemployment rate and the 2.5% inflation rate officials projected in December. It’s also a jump from the current 4.1% unemployment rate, per the February jobs report, and 2.5% PCE inflation in January.

Additionally, US gross domestic product, Fed officials predict, will grow at an annual rate of 1.7%. In December, Fed officials projected a 2.1% pace.

In a note to clients on Wednesday, JPMorgan chief US economist Michael Feroli said the projections “were revised in a stagflationary direction.”

If the Fed’s latest forecasts manifest, though, they’ll be a far cry from stagflation.

Stagflation explained

Stagflation is the ultimate doomsday scenario for central bankers. No matter what they do, it’s all but certain to inflict pain on the economy.

Low rates of unemployment tend to compensate for some of the pain that high levels of inflation bring because businesses generally can only raise prices when people are earning enough to afford it. In contrast, when unemployment is high and people are cutting corners, businesses will have a tough time passing on higher prices to their customers, which keeps inflation low.

One of the worst bouts of stagflation happened in the 1970s after a spike in oil prices from the Arab oil embargo on the US and other countries that supported Israel in the 1973 Yom Kippur War raised the cost of living dramatically. But when the Fed tried to ease inflation by raising interest rates, the economy fell into a recession.

Then, to get the economy out of a recession, the Fed lowered interest rates. That resulted in higher inflation. Ultimately it took a painful recession without interest rate cuts to get the economy back on track.

What the economy is now experiencing, partially a result of President Donald Trump’s tariff policies dampening economic growth forecasts and renewing concerns about inflation, is unlikely to prompt Fed officials to so much as whisper stagflation to one another.

“I was around for stagflation. It was 10% unemployment. It was high single-digits inflation and very slow growth,” Powell said last May, referring to stagflation in the 1970s.

We’re nowhere near those 1970s levels now.

Read the full article HERE.

Gold Rally Doesn’t Lose Bullish Momentum

The gold (XAU/USD) price gained 0.44% on Wednesday, fuelled by the prospect of Federal Reserve (Fed) rate cuts and safe-haven buying due to trade tariffs uncertainty and geopolitical instability.

As expected, the Fed held its benchmark unchanged in the 4.25–4.5% range. However, Fed policymakers still expect the central bank to deliver two 0.25 percentage points cuts by this year’s end, matching their December projection. Jerome Powell, Fed Chairman, stated that the Trump administration’s early policies, particularly import tariffs, seem to have contributed to slower US economic growth and a temporary rise in inflation.

A confluence of factors—tariff uncertainties, the prospect of rate reductions, global central bank gold demand, and renewed tensions in the Middle East—has propelled gold to an extraordinary rally, resulting in 16 record highs in 2025, four exceeding $3,000. Still, traders should watch out for possible unexpected downward corrections.

“Given the very good performance in gold through Q1, I think a correction is not out of the question. However, so far, corrections have been relatively short-lived and well bid… $3,090–$3,100 may see some resistance”, said Nicholas Frappell, global head of institutional markets at ABC Refinery.

XAU/USD rose during the Asian and early European trading sessions. Today, more interest rate decisions are coming up. Swiss National Bank (SNB) and the Bank of England (BoE) will announce their base rates at 8:30 a.m. UTC and 12:00 p.m. UTC. In addition, the US Jobless Claims report will come out at 12:30 p.m. UTC. Lower-than-expected figures could pause the rally in XAU/USD, but such a setback will likely be short-lived. Conversely, higher-than-expected results may pull XAU/USD higher towards the $3,083.

Euro Fails to Rise Even as US Dollar Weakens

The euro (EUR/USD) lost 0.38% against the US dollar (USD) on Wednesday, even as the greenback failed to rally due to the Federal Reserve’s (Fed) dovish message. As expected, the Fed held interest rates steady but indicated that policymakers anticipate reducing borrowing costs by 0.5 percentage points by the end of this year.

The US Dollar Index (DXY) weakened after the decision but generally remained positive on the day. Fed officials revised their 2025 inflation forecast upward in response to the Donald Trump administration’s tariffs. They now expect inflation to reach 2.7%, exceeding the 2.5% projection from December and surpassing the 2% target. This US inflation outlook supported the greenback and pressured EUR/USD, which has been moving predominantly range-bound for several days.

“I think that we’re probably going to be kind of floating around here until we get some firm first-quarter GDP data that’s going to be a really big tell for traders as to whether this economic weakness that everyone’s worried about, it’s fully materialising”, said Helen Given, director of trading at Monex USA.

Meanwhile, the Eurostat statement showed that inflation in the eurozone was 2.3% in February. The figure is below the previously reported 2.4% and aligns with earlier economist estimates. However, core inflation—an indicator closely watched by policymakers, which excludes volatile food and energy costs—remained at 2.6%. It held steady even after the monthly growth rate was cut from 0.6% towards 0.5%. While the revision is significant, it’s not expected to substantially alter expectations for the European Central Bank’s (ECB) April policy meeting.

EUR/USD fell slightly during the Asian and early European trading sessions. Today, the Swiss National Bank (SNB) and the Bank of England (BOE) will announce their policy rate decisions at 8:30 a.m. UTC and 12:00 p.m. UTC. The announcements may add some volatility to EUR pairs. In addition, the US Jobless Claims report is due at 12:30 p.m. UTC. Lower-than-expected figures could push EUR/USD below 1.08750. Conversely, higher-than-expected results may pull EUR/USD towards 1.09460. Also, traders should note that several ECB policymakers, including ECB President Christine Lagarde, will give speeches later today. Their remarks, particularly regarding the current economic outlook and potential policy adjustments, might offer clues about the central bank’s upcoming decisions.

Weak Employment Report Pushes AUD Down

The Australian dollar (AUD/USD) weakened against the US dollar on Wednesday but later recovered and finished the day essentially unchanged.

Earlier today, AUD/USD started to fall again after the Australian Bureau of Statistics released a surprisingly weak Employment report. Figures showed net employment fell by 52,800 in February from January compared with the expected 30,000 rise. Annual job growth pulled back sharply from 3.5% to just 1.9%. Still, figures remain in line with long-running averages. After hitting a record high of 67.2% in January, the participation rate slumped towards 66.8%. However, the unemployment rate stayed at 4.1%, matching market expectations.

Interest rate swaps market data still implies only a small 10% chance of a rate cut by the Reserve Bank of Australia (RBA) at the April 1 meeting. Meanwhile, the chances of a rate reduction in May have risen from 70% towards 78%. The RBA cut interest rates last month for the first time in four years but cautioned that further easing isn’t guaranteed, given the surprisingly strong labour market could risk stoking inflation. Now, the labour market no longer looks strong, so investors expect the RBA to turn dovish again. These expectations put downward pressure on AUD/USD.

AUD/USD dropped below the important 100-day moving average during the Asian and early European trading sessions. Today, the focus is on two central banks’ decisions and US macro data. The Swiss National Bank (SNB) and the Bank of England (BOE) will announce their policy rate decisions at 8:30 a.m. UTC and 12:00 p.m. UTC, respectively. Also, the US Jobless Claims report will come out at 12:30 p.m. UTC. Lower-than-expected figures could push AUD/USD towards 0.63000. Conversely, higher-than-expected results may pull the pair above 0.63500.

Read the full article HERE.

The UCLA Anderson Forecast, citing substantial changes to the economy from policies of the Trump administration, issued its first-ever “recession watch” on Tuesday.

UCLA Anderson, which has been issuing forecasts since 1952, said the administration’s tariff and immigration policies and plans to reduce the federal workforce could combine to cause the economy to contract. 

Its analysis was titled, “Trump Policies, If Fully Enacted, Promise a Recession.”

“While there are no signs of a recession happening yet, it is entirely possible that one could form in the near term,” said a news release from the forecaster. 

U.S. recessions are only officially declared by the Business Cycle Dating Committee of the National Bureau of Economic Research. The committee employs a variety of indicators, including production, employment, income and growth to determine if the economy is contracting. At the moment, none of the specific indicators look to be near levels that would prompt the committee to declare recession. 

The average respondent to the CNBC Fed Survey for March, published Tuesday, forecast a 36% recession probability in the next year, up from 23% in the prior month. But it remains well below the 50% level that prevailed from 2022 and 2023 in the wake of the pandemic and turned out to be wrong. That shows how difficult it is to predict a recession, or even determine if the economy is in one. The Fed Survey also shows that a recession is not the base case for most Wall Street forecasters, only that the concern is somewhat elevated.

Recessions occur when multiple sectors of the economy contract at the same time. The UCLA Anderson Forecast said reductions to the workforce from the administration’s immigration policies could create labor shortages, tariffs will raise prices and could lead to a contraction in the manufacturing sector while changes to federal spending will reduce employment for government workers and private contractors.

“If these and their consequent feedback into the demand for goods and services occur simultaneously, they create a recipe for a recession,” the statement from the forecaster said. 

‘Stagflationary’

Administration officials, from the president to his top economic lieutenants, have not specifically pushed back against the possibility of a recession from their policies. President Donald Trump has said there would be a “period of transition,” while the Commerce secretary had said a recession will be “worth it” for the gains that will eventually come from the policies.

Recessions are often the result of unexpected shocks to the economy. The surge in optimism following the election of Trump, followed by the recent sharp drop-off in some surveys, suggest that both businesses and consumers were unprepared for the extent and even the nature of some of the policies now being pursued. 

On timing, the UCLA Anderson Forecast would only say a recession could develop in the next year or two. Its report said: “Weaknesses are beginning to emerge in households’ spending patterns. And the financial sector, with elevated asset valuations and newly introduced areas of risk, is primed to amplify any downturn. What’s more, the recession could end up being stagflationary.”

Read the full article HERE.

Gold rose to a record high above $3,028 an ounce as an escalation in Middle East tensions underscored its haven appeal, and investors weighed data that fueled concern the US economy is slowing down.

Bullion climbed as much as 0.9% as Israel launched military strikes on Hamas targets in Gaza, a move that threatens to undermine a shaky truce. Hamas said at least 322 people had been killed or were missing since the airstrikes began.

Traders were also digesting US retail sales data released Monday, which rose less than forecast in February. While the figures pointed to weak spending on goods, there was no sign of a severe pullback and the data did little to alter traders’ bets on expectations for Federal Reserve rate cuts.

Still, companies, investors and economists remain cautious as consumer sentiment sours and signs of financial stress mount, amid risks of escalating trade wars sparked by US President Donald Trump.

The gloomier outlook for both the US and global economy has underscored bullion’s role as a store of value in uncertain times. The metal is up 15% so far this year, extending its strong annual advance in 2024. Several major banks have hoisted their price targets for this year higher in recent weeks.

Inflows into physically-backed gold exchange-traded funds continued for a fifth consecutive day on Monday. The amount of gold held in ETFs has risen 5% this year, after dropping for the past four years, according to data compiled by Bloomberg.

While gold has further room to run, “$3,000 was a strong resistance” in the short term, said Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp. “Even though it’s broken marginally above this, it may not signal a decisive break,” said Menon, who sees bullion rising to $3,100 an ounce within twelve months.

Spot gold was up 0.8% to $3,023.65 an ounce as of 9:28 a.m. in London. The Bloomberg Dollar Spot Index fell 0.1%. Silver, platinum and palladium all rose.

Read the full article HERE.

Bank of America Corp., Citigroup Inc. and Macquarie Group Ltd. have been vocal cheerleaders for gold during a breakneck rally that has taken prices to record highs above $3,000 an ounce. With anxiety about the global economy growing, they see plenty of reasons to stay bullish.

Gold has been on the charge since late 2022, with elevated central-bank purchases and a buying spree in China causing prices to almost double in a little over two years. Now, it is bullion’s time-tested status as a haven asset that’s drawing investor interest.

Prices broke through the $3,000 an ounce barrier on Friday, against a backdrop of growing angst about the economic risks arising from US President Donald Trump’s disruptive trade agenda. US consumer confidence has plunged, while inflation expectations have surged, and as the apprehension grows, many analysts have been hiking their price targets.

“We do still think there are some materially bullish developments likely to come for gold,” said Marcus Garvey, Macquarie’s head of commodities strategy, who raised the bank’s top-end price target from $3,000 to $3,500 last week. “I don’t really see things that would suggest to us that this rally is in an area that’s become frenzied or overextended.”

Here, illustrated in four charts, are the key factors that have Wall Street betting that bullion’s blistering rally has more room to run.

ETFs

Investors are net buyers of physically-backed gold exchange-traded funds this year, after selling them for the past four years. North America saw a major inflow in February, the largest in a single month since July 2020, according to the World Gold Council. That was partly helped by sentiment stemming from a worldwide rush to ship bullion into the US to capture the large price differential between New York’s Comex and the spot London market.

Concerns over a slowing economy may also prompt US households to seek to diversify their portfolios by buying gold ETFs, according to Citigroup analyst Max Layton. “That’s the big development that’s taking us that next step higher,” he said.

“While there’s been a lot of central-bank buying and evidence of high-net-worth individuals buying over the last 12-18 months as a hedge against downside risks in equities and US growth, the household hasn’t really bought yet — and they’re potentially only just starting,” Layton said.

For Matt Schwab, head of investor solutions at Quantix Commodities, whether ETF holdings can keep rising is crucial to gold’s move higher. ETFs played an important role in the precious metal’s rally to then-record highs during the pandemic.

Overcoming Headwinds

While gold tends to thrive during prolonged periods of economic weakness, analysts caution that bullion may get hit in the short run if there’s a heavy selloff in the stock market, as investors may opt to exit profitable gold positions to cover losses elsewhere.

“Sometimes it can get messy, as we’ve seen in 2008/2009 period, we’ve seen the pandemic: gold gets hit very hard along with all other asset classes as well when there is a big risk-off move,” said Bart Melek, global head of commodity strategy at TD Securities.

Michael Widmer, Bank of America’s head of metals research, agrees that gold could be set for short-term turbulence as investors take profits, but he still sees bullion rising further to $3,500 over the long run.

Buying could also reaccelerate in China this year, thanks to Bejing’s initiative to let insurers invest in precious metals, according to Widmer. The policy could create 300 tons of additional demand, equivalent to 6.5% of the annual global market, he estimates.

Real Rates

One striking feature of gold’s two-year bull run is that it has come despite a surge in interest rates. Typically, higher inflation-adjusted interest rates act as a headwind for gold, because bullion pays no interest, and investors can make safe and attractive returns in government bond markets.

But higher debt and deficits have meant that some investors are now pricing in an element of credit risk in some developed economy government bonds, pushing some of them to gold, according to Macquarie’s Garvey.

“Other than something like a failure to lift a debt ceiling leading to a technical default, I don’t think anyone is arguing that the US is ever going to default in dollar terms, and most countries are never going to default in local currency terms,” Garvey said.

“But if you are running an unsustainable fiscal backdrop, you are then implicitly devaluing your own currency, and gold as the hard currency really benefits from that.”

Central-Bank Buying

Central banks were the main driver behind gold’s ferocious run in 2024. They continued to buy the precious metal this year even as prices kept rising, with 18 tons of net purchases in January, according to the World Gold Council.

China’s central bank, which played a crucial role in gold’s spectacular rally last year, expanded its gold reserves for a fourth month in February, with total holdings at 73.61 million ounces by the end of last month.

Goldman Sachs — which raised its year-end forecast to $3,100 just last month — now sees a growing likelihood of an even bigger rally, driven by strong central bank buying and rising investor demand.

That’s “because US policy uncertainty may support investor demand, and because we believe that central bank gold buying will remain structurally higher,” Goldman analysts said in an emailed note on Friday.

Read the full article HERE.

The stock market is in a world of hurt, giving up all of its post-election gains due to worries about tariffs, trade wars, and the threat of recession. But gold continues to shine! The yellow metal is getting ever closer to $3,000 an ounce, opening up investment opportunities. Here are some to consider from top MoneyShow experts.

Sean Brodrick | Weiss Ratings Daily

There’s something very curious going on in gold — and it says something about where the yellow metal might be headed. An easy way to play the coming move is through the SPDR Gold Shares ETF (GLD).

The first thing you need to know is that seasonally speaking, gold shouldn’t be rallying at all. This is the weak time of the year for gold, as you can see from this chart…

Gold usually doesn’t start making significant gains until April, if then. To be sure, this is an average, and every year is different. But this rally at this time of year is kind of a shocker!

So, what makes this year different? “Chaos as policy.”

First, I’m pretty sure President Trump and his team have set out to “break” the US government. That’s what Elon Musk’s Department of Government Efficiency, or DOGE, is all about. Their plan is to rebuild and restructure the government, only leaner. Trump says we’ll be much better off when it’s all said and done. In the short term, it’s chaos.

Meanwhile, the White House’s on-again, off-again approach to tariffs with our major trading partners is so chaotic, it can barely be called a policy. Chaos scares investors. And that is one of the major forces driving gold higher.

Second, this raises the odds of the Federal Reserve cutting benchmark interest rates this year. As recently as Feb. 12, the market was pricing in only one rate cut. While Fed Chair Powell said recently that the Fed wants to take it slow on rate cuts, the market is now pricing in three cuts in 2025, starting in June. Combined with the rate cuts that began last year, America is in a rate-cutting cycle.

Now, we don’t know exactly how much gold will run this time around. But odds are it’s going a LOT higher. If the past is a guide, gold will more than double. GLD has a Weiss Rating of “B-” and an expense ratio of just 0.4%, which is pretty cheap.

Eoin Treacy | Fuller Treacy Money

Gold has been very resilient over the last several weeks. The current range has a much narrower amplitude than those posted over the last year. There are two ways of thinking about it.

The first is the pace of the advance is picking up and traders are not willing to wait for a deeper pullback to buy. The second is the trend is still very consistent and a reaction of $200-$250 is still possible.

Of course, the other point is this is the US Dollar price of gold. The currency has fallen sharply over the last month so that has helped to support the gold price.

In British Pounds, the price of gold has pulled back £133 from its peak. The October – January range has a maximum drawdown of £160. The April-to-September range had an amplitude of £154.

The message is quite similar. The size of the current reaction is smaller than the last two. Since this has occurred against a background of an appreciating Pound, that is good news.

It’s a similar story for the Australian Dollar price. This reaction was for A$160. The last two were A$332 and A$351, respectively.

When we look at gold priced in several currencies, there is no questioning that the pace of the advance has picked up. This global surge in demand for physical gold has been driven by central banks. Political volatility has increased substantially since Donald Trump took office.

The news over the last week has been filled with talk of tariffs and war. It’s easy to get caught up in the minute details of which tariff is being increased or decreased. The bigger message is more important to gold.

The US is no longer a reliable partner. That means the status quo is no more and we are entering a new era of great power politics. That is going to have far-reaching consequences.

Gold is currently pausing below the big, psychological $3,000 level. Twenty years ago, $3,000 was considered an ambitious, far-away target. Today it is upon us and I don’t hear many people talking about a future price of $5,000 or $10,000.

I can’t tell you when those levels will be achieved, but the long-term trend of currency debasement is alive and well. That means those targets are inevitable. The only question is when.

Mark Skousen | Forecasts & Strategies

Gold is over $2,900 an ounce and headed for $3,000, largely due to global uncertainty and strong central bank purchases by China and other countries. The SPDR Gold Shares ETF (GLD) is ahead nearly 11% in six weeks. I also like Kinross Gold Corp. (KGC).

Here’s a surprise: Which is up more over the past 25 years — gold or stocks? The average investor would answer stocks. But the correct answer is gold.

As the Wall Street Journal reported recently, the S&P 500 — including dividends — returned 525% between 2000 and the end of 2024. But gold increased by more than 800% over the same period, jumping from $281.63 an ounce to $2,603.01.

It remains a great inflation hedge. And mining stocks are a good way to play it. That brings me to KGC. It yields only 1%, but is now up 30% for us.

Read the full article HERE.

Signs of weakness are showing up in spending on everything from basics to luxuries

Key Points:

-Consumer spending is declining across all income levels due to concerns about tariffs, inflation and a potential recession.

-Retailers are reporting weak demand since the start of the year as consumers become more cautious about their spending.

American consumers have had a lot to fret about so far this year, between never-ending tariff headlines, stubborn inflation and most recently, fresh fears about a recession. These concerns seem to be hitting spending by both rich and poor, across necessities and luxuries, all at once.

Take low-income consumers: At an interview at the Economic Club of Chicago in late February, Walmart Chief Executive Doug McMillon said “budget-pressured” customers are showing stressed behaviors: They are buying smaller pack sizes at the end of the month because their “money runs out before the month is gone.” McDonald’s said in its most recent earnings call that the fast-food industry has had a “sluggish start” to the year, in part because of weak demand from low-income consumers. Across the U.S. fast-food industry, sales to low-income guests were down by a double-digit percentage in the fourth quarter compared with a year earlier, according to McDonald’s.

Dollar General on its earnings call on Thursday said its customers report only having enough money for basic essentials; some are having to sacrifice even on necessities. The company doesn’t expect any improvement in the economic environment this year and is watching potential changes to government entitlement programs. Dollar stores rely more heavily on food-stamp benefits, which could be on the table for budget cuts.

Things don’t look much better on the higher end. American consumers’ spending on the luxury market, which includes high-end department stores and online platforms, fell 9.3% in February from a year earlier, worse than the 5.9% decline in January, according to Citi’s analysis of its credit-card transactions data.

Costco, whose membership-fee-paying customer base skews higher-income, said last week that demand has shifted toward lower-cost proteins such as ground beef and poultry. Its members are still spending but are being “very choiceful” about where they spend, Chief Financial Officer Gary Millerchip said. He said consumers could become even pickier if they see more inflation from tariffs. Dollar General said Thursday that sales to higher-earning households, who are seeking cheaper options, accelerated in the past few weeks.

Department stores are seeing signs of penny-pinching all around, too. On Tuesday, Kohl’s CEO Ashley Buchanan said consumers making less than $50,000 a year are “pretty constrained” on discretionary spending, but added that “it’s also pretty challenging” for those making less than $100,000. The company gave a much weaker sales forecast for the full year than Wall Street expected, causing its share price to plunge 24% on Tuesday. Last week, Macy’s CEO Tony Spring said the “affluent customer that’s shopping [at] Macy’s is just as uncertain and as confused and concerned by what’s transpiring.” 

The economy has seen pockets of weakness in recent years, but nothing that suggests such widespread weakness. The period following the pandemic was dubbed by some a “Richcession” because higher earners’ wage growth lagged behind those of in-demand blue-collar workers. But poorer households’ gains have since reversed: Starting in 2023, Covid-era increases to food-stamp benefits were rolled back, and by late 2024, wage growth for the lowest-income Americas started trailing those of richer Americans, according to data from the Federal Reserve Bank of Atlanta. Several years of inflation—particularly on necessities such as groceries, rents and utility bills—have hit poorer Americans hard. But a strong stock market, buoyed by artificial-intelligence hype, kept wealthier folks spending.  

Now, everyone seems to be feeling more cautious, and this spending restraint is affecting several categories. There are signs that consumers are pulling back on air travel, for example. Delta Air Lines, American Airlines and JetBlue all cut their first-quarter guidance earlier this week. Delta CEO Ed Bastian said at an industry conference on Tuesday that there was “something going on with economic sentiment, something going on with consumer confidence.” 

Citi’s analysis of its U.S. credit-card data shows that spending has fallen across most retail categories. In the retail quarter to date, spending plunged 12% and 22% on apparel and athletic footwear, respectively, compared with a year earlier. But even less-discretionary categories such as food retail, aftermarket auto parts and pet retail are seeing moderate declines.

Retailers including Target, Foot Locker and Lowe’s have all reported seeing weak demand in February. Target CEO Brian Cornell said last week that consumers are thinking about the potential impact of tariffs and what it will mean for them. Foot Locker, which said last week that its consumers were “cautious and sensitive” in February, said its customer base, which skews young, is “thinking about [their] overall cost of living, plus some uncertainty about tariffs.”

This week alone, consumers have had plenty of new developments to digest. President Trump on Sunday declined to rule out a U.S. recession as a result of his economic policies, causing stocks to plummet. This was followed by yet another roller coaster of tariff threats, counter-tariffs and reversals. While Wednesday’s inflation data showed price increases slowing down slightly in February, that is cold comfort because it is too early to reflect the effects of Trump’s tariffs.

But it isn’t all about tariff fears, or even some broader sense of uncertainty. Many also have less cold hard cash on hand. Checking and savings deposit balances across all income levels have declined over the 12-month period through February and are getting closer to inflation-adjusted 2019 levels, according to card data tracked by Bank of America Institute. Wage growth for all income groups has slowed over the past year, per data from the Federal Reserve Bank of Atlanta. Americans’ inflation-adjusted debt balances are starting to surpass prepandemic levels. 

What this means is that consumers generally are less able to absorb shocks, just as uncertainty is soaring. It is hard to blame them for turning cautious, even if that means the economy suffers.

Read the full article HERE.

The next generation of retirees isn’t feeling so confident about the future

Generation X, a cohort that never got quite as much attention as its baby-boomer elders or its millennial younger siblings, will begin turning 60 this year, and many are worried about their retirements. 

One of the biggest reasons for that lack of confidence? They’re juggling too many financial responsibilities, such as mortgages, children’s education, and the rising cost of living, a new report from Fidelity has found. Generation X has almost become synonymous with the “sandwich generation,” taking care of aging parents and children at the same time. 

Financial advisers have taken notice of the generation’s worries. “This complex web of financial obligations makes it incredibly difficult to prioritize retirement savings,” said Ashley Folkes, a certified financial planner at Farther Financial. “It’s imperative to understand that, while this stage of life presents unique challenges, it’s not insurmountable. The key is to take a holistic view of your financial situation, clearly define your values and goals, and engage in open discussions about what truly matters.” 

Among all workers, Generation X was the most mixed in characterizing its confidence in retiring on its own terms, according to Fidelity Investments’ latest 2025 State of Retirement Planning report. Almost half, or 45%, of Gen X said they weren’t confident, compared with 30% of baby boomers, 26% of millennials and 20% of Gen Z who said the same. 

Overall, 67% of Americans in their “planning years,” as Fidelity put it, said they are confident about their retirement prospects, though that is down seven percentage points from the previous year. 

Another factor contributing to retirement insecurity is that Gen X represents a tipping point in retiree reliance on 401(k) plans instead of pensions, said Rita Assaf, vice president of retirement at Fidelity. More than six in 10 respondents in their planning years, or 61%, said their own retirement accounts, including 401(k) plans, IRAs and small-business plans, will be their biggest retirement income streams, compared with about half of current retirees, the report found. 

Another 62% of respondents said they’re not sure if those savings will last their lifetimes. 

With the bulk of their retirement savings in self-directed investments, near-retirement Gen X–ers will only have anxiety levels heightened by stock-market volatility. The generation has weathered the tech-stock bust and the Great Recession during their working and saving years, in addition to smaller market disruptions, and Fidelity’s report comes as the U.S. stock market has been suffering declines across the board, pressured by worries about a trade war, a possible recession and declining consumer confidence. 

Retiring in the midst of a down market can throw careful retirement planning into turmoil. Advisers typically suggest avoiding withdrawals from investment accounts when the market is in a downturn because it could require taking a larger chunk of the portfolio and thus potentially hurting future returns, known as sequence-of-returns risk. 

Hope is not lost for Gen X–ers, advisers say. And this generation, importantly, should create a retirement plan if they haven’t already, experts said. “If you’re planning for something, you feel better,” Assaf said. “You don’t have to do it alone, especially with retirement planning. There’s a lot of help.” 

A retirement plan involves assessing current finances, determining clear goals for the future and doing the math to attain those goals, Jon Ulin, a certified financial planner and managing principal of Ulin & Co. Wealth Management. “A well-structured, written plan acts as a roadmap with measurable milestones,” he said. “Rule of thumb: Understanding how much you’ll need as a lump sum to fund a multidecade retirement — while accounting for inflation and taxes — is essential for long-term financial security.” 

Other tasks include boosting retirement contributions while still able to do so, paying down debts (especially high-interest debts) and planning for healthcare expenses, Ulin said. Engaging a financial adviser can help. 

The financial-services industry lately has put a spotlight on annuities, which are investment products that offer guaranteed income. Investors contribute a certain amount of money with the expectation of receiving a stream of income in the future. Annuities have had an imperfect reputation in the past — and investors should scrutinize any product before taking part, regardless of where they heard the recommendation — but having these additional sources of income in retirement can help reduce anxiety. 

When looking for an adviser, search for professionals who will look at the full financial picture — as opposed to just recommending investment products — and ask about fees, retirement-planning strategies, their client base and how they will communicate with you as life twists and turns into, and in, your retirement years.

Read the full article HERE.