Monthly Comment – May 2025
During the month of May, we saw a recovery in the financial markets, although uncertainty remains present. We received new statements from Trump, but his tone has been softer and more market-friendly. Among other things, Trump announced that he does not intend to remain president after his current term and that he will not attempt to remove Federal Reserve Chair Jerome Powell. A statement about imposing 50% tariffs on goods from the EU was shortly thereafter revised, indicating that negotiations are ongoing and the implementation of the tariffs is postponed until early July. The market is once again more focused on what Trump actually does rather than what he threatens to do. The Fed left interest rates unchanged, as expected, in the range of 4.25–4.50%. Credit rating agency Moody’s downgraded the U.S. credit rating due to rising debt levels and declining tax revenues. In Sweden, the central bank’s key interest rate was also left unchanged. The earnings season can be summarized as acceptable, although companies are struggling to provide guidance about the future. We see a risk that upcoming reports for Q2 and Q3 may face more challenges, where uncertainty around tariffs and a strengthening SEK could have negative effects.