Four investment perspectives on Trump’s first 100 days

The first 100 days of a US president’s term in office have been regarded as a milestone and a benchmark since Franklin D. Roosevelt’s first term in 1933. April 30 marks the first 100 days of the current Trump administration, and the period has been characteristically unpredictable. 

While much has happened in these first 100 days — changes to the US Medicaid program, proposed deregulation, and a crackdown on immigration, for example — the sweeping tariff policies implemented and subsequently paused on April 9 have dominated recent headlines. While most so-called reciprocal tariffs are on pause, the US president has upped the announced tariff rate on China to 145% at the time of writing.

Markets responded to the whipsaw policy announcements by plummeting in the wake of tariff implementation and soaring after the pause was announced. The nature of this situation, in which the president enacted the most protectionist trade policies in nearly a century only to walk almost all of them back on the same day, is emblematic of his style. So, too, is the back-and-forth tariff-rate-raising with China, which has also raised tariffs against the US. 

So, if there’s one lesson investors can learn from the first 100 days of the Trump administration, it’s to brace for uncertainty, which is likely to endure beyond these first 100 days. A pause on tariffs isn’t a promise of stability or a soaring equity market, but rather, this situation is a reminder of just how quickly and severely policy decisions can impact markets. 

This recent bout of market turbulence serves as a staunch reminder of the potential benefits of actively managed strategies, which tend to be nimbler and more adaptable than their passive peers. To help us cut through the noise, three of our investment experts across fixed income and equity share their insights on first 100 days of Trump’s second term and what it might mean for investors.

The first 100 days of the Trump presidency have been marked by volatility, uncertainty, and change. After placing extreme focus on government spending and immigration initially, the administration made clear its plan to reduce the US trade deficit with global trading partners via tariffs. Attempting to enact monumental change in global trade and foreign relations by implementing protectionist policies can cause volatility even when done patiently and with precision, but this administration has elected to do so in a rapid, unclear manner, which has resulted in higher levels of uncertainty from businesses and consumers, and elevated volatility in financial markets. I believe these volatile dynamics will persist in the medium term, past the first 100 days.

In my view, the probability of a recession in the US is high, particularly because a slowdown in economic growth already appeared to be underway prior to these recent events. Now, with all this talk of trade wars and tariffs, the risk of a slowdown has only increased. I’m paying close attention to US consumer spending and demand patterns, the impact of potentially lower USD liquidity globally, and the demand for US assets from foreign buyers. I believe the Trump administration may be underestimating the value of the capital account surplus the US has run in the past 15 years and overestimating the impact of the goods trade deficit over that same time period.

The opening months of Trump's second term have marked a significant pivot from previous economic policies. Even before the recent tariff announcements, we've seen substantial market reactions to the government restructuring led by the Department of Government Efficiency, widespread contract cancellations, and immigration policy changes. All of this has contributed to a climate of uncertainty that's affecting business decisions.

When businesses can't predict what's coming next, they typically pause hiring plans and delay investments. Similarly, consumers tend to pull back on spending. The newly announced tariffs have only amplified these concerns, creating more economic turbulence.

I believe we're likely already in recession territory, with declining output and employment numbers starting to emerge. This policy environment has created a real dilemma for the US Federal Reserve (Fed). While economic contraction would normally trigger interest-rate cuts, the Fed faces a credibility challenge in doing so when inflation remains elevated. My view is that we'll see interest-rate cuts eventually, but investors should expect significant volatility along the way. This will likely create a steepening yield curve — short-term rates dropping while longer-term rates remain more stubborn.

We've already witnessed credit spreads widening considerably across markets. Though credit pricing may not yet reflect a deep recession scenario, it's probably too late for investors to be reducing risk exposure now. In my view, the more relevant dilemma is when to strategically increase risk positions again.

The market is creating interesting opportunities as dislocations emerge between credit sectors. US credit, which was recently among the most expensive markets globally, has become notably more attractive. I expect to see compelling chances to shift dynamically between sectors as these dislocations continue developing over the coming months.

Uncertainty has been a key characteristic of the first 100 days of the current Trump administration. His policy proposals, from deregulation to trade protectionism, have far-reaching macroeconomic implications, but if the first 100 days are any indicator, the path to realizing his goals is not likely to be linear. Even before the president took office, I expected to see shorter business cycles and persistently higher macro volatility — a view I maintain and prepare for looking ahead.

The “Liberation Day” tariffs initially increased the risk of a slowdown in US growth and global economic cycles through greater trade barriers and elevated inflation risks. Since the tariffs were paused, these risks and the attendant uncertainty have abated somewhat and equity markets have rallied. However, if some form of the proposed “reciprocal” tariffs are implemented, there will be broader global equity market ripple effects.

So, I think there’s a case to be made for more dynamic equity positioning, and I echo Nick’s suggestion that, in these times of market stress, actively managed strategies with a process for positioning portfolios appropriately for the economic cycle may be beneficial versus passive alternatives. Active managers can apply disciplined stock selection processes geared toward minimizing exposure to the most heavily hit areas of the market and carefully evaluating company-specific fundamentals to identify attractive or idiosyncratic opportunities among high-quality companies better positioned to weather the storm. As we pass this milestone date, we’ll continue to keep a close eye on US equity markets and evolve our views accordingly.