Hardwood Floors October/November 2025

Finance (Continued)

RECESSION RISKS WILL RISE IF EFFECTIVE TARIFF RATE SURPASSES 20 PERCENT

EFFECTIVE TARIFF RATE:

2024

2025 Increase

Source: LPL Research, Fitch Ratings, Census Bureau 6/9/25

TRADE UNCERTAINTY WILL BE A TOP CONCERN

American companies currently are facing significant risks stemming from tariff uncertainty, which has become a major obstacle to strategic planning and investment. Volatile trade policy, characterized by unpredictable tariff adjustments, creates an unstable environment that discourages firms from committing significant capital to expansion and new projects. When tariff policy is so fluid and unpredictable, companies are hesitant to invest in new manufacturing facilities, infrastructure, or international markets, fearing changes will erode profit margins. This unpredictability adds a layer of financial risk that complicates long-term planning, forcing companies to adopt more cautious and conservative approaches to growth. This hesitation not only dampens immediate growth prospects, but also prolongs the period of economic sluggishness, as companies prioritize risk mitigation over innovation and expansion. In this context, tariff uncertainty remains a critical barrier to sustained economic growth and competitiveness for American businesses and will drag on the economy in the second half of the year. THE BOTTOM LINE In the second half of the year, the delayed effects of trade policy will begin to take a more noticeable toll on the economy, resulting in slower

To view the complete Midyear Outlook 2025:

Pragmatic Optimism – Measured Expectations, visit LPLMYCFO.COM.

growth, weakening labor demand, and a modest uptick in inflation. These emerging challenges will create a more complex landscape for the Fed, requiring them to navigate carefully as they assess the appropriate course for monetary policy. Tariff and geopolitical headlines will continue to drive market sentiment, adding complexity to both growth and inflation forecasts. The LPL Financial Research team provided this information. LPL Financial is located in Chesterfield, Missouri. Contact Jonathan Benner, Certified Financial Planner™ with LPL Financial, at jonathan.benner@lpl.com or 636.200.4204.

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