By Eric Parnell, CFA on February 5, 2025February 5, 2025 <span data-mce-type="bookmark" style="display: inline-block; width: 0px; overflow: hidden; line-height: 0;" class="mce_SELRES_start"></span> Tariffs, Inflation, and Market Stability: While tariffs contribute to inflation, the primary focus should be on the broader economic impact of the new administration’s policy measures. Market stability depends on adequate liquidity and strong corporate earnings, but persistent inflationary pressures could threaten financial markets. Key Inflation Metrics to Watch: Personal Consumption Index: Released in late January, it reported headline and core inflation below 3%, though recent increases require close monitoring. Five-Year Breakeven Inflation Rate: It is currently at approximately 2.6%. A rise to 3% or higher could indicate inflation concerns, potentially leading to Federal Reserve rate hikes—an outcome that markets would likely react negatively to. Market Strategy for 2025: With a new administration in Washington, headline risks and market volatility will remain prevalent. Maintaining discipline and adhering to a long-term investment strategy is essential for navigating short-term fluctuations and achieving long-term financial objectives. Great Valley Advisor Group is excited to present the latest episode of our video series featuring our Chief Market Strategist, Eric Parnell, CFA. At under 3-minutes each, these bi-weekly videos are meant to provide concise observations on relevant economic indicators to strengthen your knowledge and understanding of current market trends. Subscribe to the GVA YouTube channel Eric Parnell is solely an investment advisor representative of Great Valley Advisor Group, and not affiliated with LPL Financial. Any opinions or views expressed by Eric Parnell are his own and are not those of LPL Financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth may not develop as predicted. LPL Compliance Tracking #: 692236