Economic review

First quarter 2025: Turbulence under Trump

The first quarter of 2025 saw many changes in the financial markets, mainly due to the economic policy of new US President Donald Trump. His plans for import tariffs created uncertainty, putting pressure on the US stock market.

The European Union is considering borrowing EUR 800 billion to invest more in the European defence industry. The new German government has also presented plans to support its industry and infrastructure, to which end Germany is taking on more debt than before. As a result, interest rates in Europe have risen sharply. This affected the value of bonds (loans to companies or to the government).

During the past quarter, US equities performed the worst, while European equities performed the best. The decline in US rates was mainly driven by weaker economic expectations, as financial markets expect President Trump's trade policies to hurt the US economy.