Weekly Talking Points for Financial Advisors (3/31/25)

Read the highlights of this week's commentary from Helios:

• Overall inflation held steady last month, but service prices are still climbing. The Federal Reserve’s preferred inflation gauge — the core Personal Consumption Expenditures (PCE) Price Index — rose 0.4% from January and 2.8% year-over-year, slightly higher than expected. The overall PCE (including food and energy) increased 0.3% month-over-month and 2.5% annually.
• Consumer spending rose 0.4% in February after a 0.3% decline in January, but spending adjusted for inflation increased just 0.1%, suggesting inflation is weighing on demand. The rebound was driven by durable goods, especially vehicles, as buyers made purchases ahead of expected tariffs. Service spending slowed, and overall inflation-adjusted spending is now on track to decline in the first quarter.
• President Trump announced a 25% tariff on imported autos and auto parts, set to take effect on April 3. The move has drawn sharp criticism and retaliation threats from key trade partners. Economists warn the tariff could raise prices, limit consumer choice, reduce US manufacturing jobs, and lower this year’s GDP growth by 0.2%.

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