There’s no shortage of headlines right now: government shutdown threats, talk of renewed tariffs with China, shifting Federal Reserve policy. Understandably, many investors are asking whether this mix is setting us up for trouble.
The reality is more nuanced …….
Let’s start with the government shutdown talk. While it sounds alarming, history tells us that markets rarely react in any meaningful or lasting way. We’ve actually had around twenty shutdowns since the 1970s, and even the longest one — thirty-five days in 2018–2019 — barely registered in market performance. That said, every episode is different, and if this one were to lead to missed paychecks or layoffs
instead of temporary deferrals, we could start to see real economic impact. So while we’re not overly concerned, we are paying close attention.
Tariffs have also re-entered the conversation after former President Trump floated the idea of a 100% tariff on Chinese rare earth minerals. Markets didn’t love that headline, and volatility picked up as investors tried to guess whether a new trade
skirmish might be brewing. Tariffs tend to act like taxes — they don’t break the system overnight, but they do influence pricing and sentiment. For now, it’s more of a watch-and-wait situation than one requiring immediate action but has renewed market volatility.
On the monetary side, the Federal Reserve has already cut rates once by a quarter point, and we believe there’s a good chance of one or two
more reductions before year end. That kind of shift can actually be a tailwind for the market— especially for longer-term investors — because falling rates create lower borrowing costs. However, for savers, it has the opposite effect and in anticipation, we’ve been extending maturities across much of our fixed income allocations to lock in today’s higher rates before they drift lower. It’s one of those rare instances where moving early can make a meaningful difference years down the road.
Meanwhile, corporate earnings have been coming in fairly strong so far this season. We’re less focused on whether a company beats expectations by a penny and more interested in how the leadership is guiding for the next couple of quarters. So far, the tone has been cautiously constructive — not euphoric, but not recessionary either.
The common thread through all of this is simple: we are not sitting on our hands. We’re watching the data, the policy moves, the sentiment shifts very closely— and we’re prepared to adapt when necessary. But we’re doing it with perspective, not panic.
If you’re worried, that’s okay — that means you care. Our job is to care with you, but act for you — patiently,
deliberately, and with your goals in mind as a FIDUCIARY for you. Always feel free to reach out to your advisor to discuss any concerns as we get it.
