Market and Politics Report- May 2025

Market and Politics Report- May 2025 

 Capital Markets Images – Browse 977,655 Stock Photos, Vectors, and Video | Adobe Stock

An extremely eventful month for the markets, Washington, and trade. From trade deals, overseas trips, to the passage of the "one-big-beautiful bill" in the house, May was by far a pretty action-packed month. 

Jerome Powell | Biography, Federal Reserve, & Facts | Britannica

To recap the earlier parts of the month, the Fed kept rates steady, at 4.25-4.50%, and the US made trade deals with the UK, as well as China. The Fed's news about the stabilization of the economy, in contrast to earlier activity in April because of the US tariffs, kept the major indexes and markets steady. Then with the major trade deals with the UK and China brokered by the Trump Administration, markets spiked, returning to pre-tariff levels once again. Also, CPI data for April came in early May at 2.3%, lower than expected. This helped to ease some consumer fears of recession and higher prices long-term.

Trump sets new course for American policy in Middle East

From May 13 to May 16, President Trump and various Fortune 500 CEO's, including Jensen Huang (NVDA) and Lisa Su (AMD), traveled to the Middle East, specifically Saudi Arabia, Qatar, and the UAE. During this trip, the Trump Administration made efforts to unite the Middle East with the US' goals, steering these nations away from involvement with China. Also, over $1.4 trillion in pledged investment in the US and with US-based companies was secured, pushing total investment in the US to over $10 trillion since January. As shown, this trip was economically and geopolitically beneficial.

Trump administration officially accepts jet from Qatar for use as Air Force One : NPR

 Continuing with news from the Middle East trip, the Department of Defense also accepted a $400 million 747 from Qatar, that will serve as Air Force 1 in the coming years. This move was controversial, with some claiming that Trump accepted the jet for himself, though the White House maintains that this notion is incorrect.

Tense Standoff at New ICE Detention Center as Mayor Joins Protest - The New York Times

For major political news, during the week of May 20, arrests of major politicians, including Congresswoman LaMonica McIver and Newark mayor Ray Baraka, for assaulting ICE agents at a facility in Newark. This comes amidst the Trump Administration's crackdown on illegal immigration,  and the Democrats' efforts to dilute the efforts of the Administration. This event serves as a staunch reminder that people are allowed to voice concerns against the will of the government, without enacting violence.

House Republicans pass 'big, beautiful bill' after weeks of division - POLITICO

Lastly, just before Memorial Day, the House passed the "one-big-beautiful bill" (act), passed with a slim majority. This bill, a reconciliation bill (having to do with the fiscal policy, taxes, and used to accelerate adjustments to the Federal budget), includes the extension of the 2017 Trump tax cuts (including SALT deductions), streamlining of medicaid, enhanced funding for border security, and decrease in regulations in the government. This bill has been greatly encouraged by the President and the vast majority of Republicans. However, many Democrats oppose the bill, as well as some economists and Republicans, who fear the bill is too expensive, and for some raise in the SALT deduction will be detrimental for most states (that do not have high state and local taxes). The bill now moves on to the Senate, with a "deadline" on July 4 to get the bill passed, and brought to the President's desk. 

800+ Partisan Politics Stock Photos, Pictures & Royalty-Free Images - iStock | Political parties, American flag

Well, that's another month. Looking forward to June, hopefully bringing more positive geopolitical and economic news to spring us into summer.



Comments

  1. Jim DJune 13, 2025 at 9:14 PM

    The Fed is in such a difficult position right now. The Fed will continue to watch the data and stay out of the politics despite the pressure to lower interest rates. Maybe we get at least one rate cut by the end of 2025 but the Fed would rather be a little late than early regarding any interest rate reductions.

    ReplyDelete
  2. DarrenJune 14, 2025 at 1:15 PM

    This is an excellent summation of the end of May. These pivotal topics are worthy of in-depth consideration. The relationship between politics and economics seems to always be expanding. Unfortunately, June will have plenty to ponder. We all look forward to reading the next entry about these volatile times. Keep up the great work!

    ReplyDelete

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