Rick Rieder’s latest market commentary highlights the challenges facing the U.S. economy amid elevated policy uncertainty, rising interest rates, and shifting global capital flows. The note shares the top 10 things to consider today:

1. Tariffs can continue to drive market volatility.
2. A focus on lower rates is understandable with the growing uncertainty of where the debt is going. The administration will want to ensure rates do not move higher in reaction to tariff policy. After some of the largest moves higher in US Rates of the last 50 years, they will likely move forward with this front-of mind.
3. The US is a largely domestic, services-oriented economy.
4. Federal spending has been a large contributor to overall economic activity over recent years. The magnitude of cuts here will be important to watch.
5. Employment growth has largely been driven by healthcare, education, and immigration – these three areas are under pressure today and represent a risk to the data to watch closely going forward.
6. Higher interest rates have contributed to the housing affordability crisis, particularly for the lower 50% of income earners.
7. Despite significant progress in reducing post-pandemic inflation, inflation remains persistently high above the Fed’s target, creating challenges for the Fed.
8. The range of growth outcomes is increasingly uncertain, with stagflation becoming a more significant risk.
9. We like being a lender in Europe.
10. Today asset allocation in portfolios should look to optimize return, balance, and risk. Income still wins.