Unadorned Notes: March 22-25, 2025
U.S. Growth Rises, Sentiment Falls; Consumer Confidence Hits Four-Year Low; U.S. Market Exceptionalism Fades; Trump Considers Tariff Exemptions; IRS May Share Data With ICE
Economics, Finance, and Business
U.S. Growth Rises, Sentiment Falls: U.S. business activity accelerated in March 2025, driven by the services sector, according to S&P Global’s flash Composite PMI, which rose to 53.5 from 51.6 in February 2025. Despite the uptick, business sentiment declined sharply amid concerns over new import tariffs and substantial federal spending cuts under the Trump administration. Input costs surged to their highest level since April 2023, with manufacturers particularly affected by higher staffing costs and tariffs, leading to increased consumer prices. The manufacturing PMI fell back into contraction at 49.8, while services expanded more strongly than expected at 54.3. The Federal Reserve maintained interest rates at 4.25%–4.50%, projecting slower GDP growth and higher inflation for 2025 amid continued economic uncertainty.1
U.S. Equipment Borrowing Declines: U.S. companies borrowed $9.7 billion for equipment financing in February 2025, a 7.4% decline from the same month in 2024, according to the Equipment Leasing and Finance Association (ELFA). The drop reflects ongoing caution in capital investment amid broader economic uncertainties and volatile bank financing conditions. Credit approval rates remained stable at 75%, suggesting consistent lender confidence despite reduced demand. The ELFA confidence index fell to 58.1 in March 2025, indicating growing concern over near-term business conditions.2
Consumer Confidence Hits Four-Year Low: U.S. consumer confidence fell sharply in March 2025, with the Conference Board’s index dropping 7.2 points to 92.9, the lowest reading since January 2021. Rising concerns over tariffs and economic policy uncertainty contributed to a 12-year low in the survey’s expectations index, signaling increased recession fears. Moody’s warned separately that U.S. fiscal strength is weakening amid growing deficits and rising debt costs. The decline in sentiment was most pronounced among consumers over 55 and across most income groups, except those earning above $125,000. Economists linked the erosion of consumer morale to policy instability and apprehension about the labor market and personal income outlook.3
U.S. New Home Sales Rise: Sales of new U.S. single-family homes increased 1.8% in February 2025 to a seasonally adjusted annual rate of 676,000 units, according to the Census Bureau. Warmer weather and lower mortgage rates helped boost demand, although broader economic uncertainty may limit future gains. January 2025’s sales figure was revised upward to 664,000 units. Compared to February 2024, new home sales were up 5.1% year over year. The median new home price declined 1.5% annually to $414,500.4
U.S. Market Exceptionalism Fades: U.S. financial markets have experienced a rare dual sell-off, with the dollar down 4% and the S&P 500 declining nearly 4% year-to-date, amid growing concerns over tariffs and economic policy under President Donald Trump. The Conference Board and Moody’s both cited heightened market volatility and fiscal deterioration, while investors have shifted funds into short-term Treasuries, reflecting caution over long-term growth prospects. Global reserve managers and asset allocators have increasingly diversified away from the dollar, amid growing interest in euro-denominated assets and stronger fiscal signals from Europe. While some economists argue it is too early to declare the end of U.S. exceptionalism, sentiment has shifted toward reduced optimism about the U.S. economic outlook.5
23andMe Files for Bankruptcy: Genetic testing company 23andMe filed for bankruptcy in the U.S., citing weak demand and reputational damage from a 2023 data breach affecting nearly 7 million customers. The company, once valued at $3.5 billion, saw its stock fall 50% to 88 cents following the resignation of CEO and co-founder Anne Wojcicki, who had previously made failed buyout attempts. 23andMe will continue operations during the sale process after securing $35 million in financing, with interim leadership assumed by CFO Joe Selsavage. Privacy concerns have intensified, with officials urging customers to delete their genetic data, though the company maintains its privacy policies remain unchanged through the proceedings. The company reported estimated liabilities between $100 million and $500 million and has ended its therapeutics development while laying off 200 employees.6
U.S. Politics, Policies, and Geopolitics
Trump Considers Tariff Exemptions: President Donald Trump signaled potential exemptions from reciprocal tariffs scheduled for April 2, stating that some nations may receive breaks. The proposed tariffs, originally aimed at aligning U.S. duties with those of its trading partners, may be softened or delayed, particularly for sectors such as automobiles, lumber, pharmaceuticals, and semiconductors. Markets responded positively to the possibility of reduced tariff implementation. Separately, Trump announced a 25% tariff on any country importing oil or gas from Venezuela, describing it as a “secondary tariff” tied to migration concerns. The announcement followed a meeting with oil executives, after which the U.S. Treasury extended Chevron’s license to operate in Venezuela through late May 2025.7
Trump Officials Deny Signal Breach: President Donald Trump and top intelligence officials denied that classified military details were shared on a nongovernment Signal chat about planned strikes on Houthi militants in Yemen. CIA Director John Ratcliffe and Director of National Intelligence Tulsi Gabbard testified to the Senate Intelligence Committee that no classified information was discussed, despite a report by The Atlantic claiming otherwise. National security adviser Mike Waltz, who organized the group thread that included journalist Jeffrey Goldberg, came under scrutiny, though Trump publicly defended him. Lawmakers, particularly Senate Democrats, questioned the plausibility of the officials’ claims and called for the release of the full message thread. The National Security Council is conducting a review of the incident, and the FBI declined to confirm whether an investigation is underway.8
Trump Unveils F-47 Fighter Jet: President Donald Trump announced the development of the F-47 fighter jet, awarding Boeing a $20 billion contract to manufacture what military officials describe as a generational leap in U.S. air combat capability. Air Force Chief of Staff Gen. David W. Allvin called the F-47 “the most advanced, lethal and adaptable fighter ever developed”, intended to replace the F-22 Raptor. While specifications remain limited, the aircraft is reportedly capable of speeds exceeding Mach 2 and will operate alongside unmanned drones. Trump claimed the prototype has been flying covertly for five years, though unit costs have not been disclosed and some critics questioned the program’s fiscal impact. Former Air Force Brigadier General John Teichert said the F-47 positions the U.S. ahead of adversaries such as China in the race for sixth-generation airpower.9
U.S. Ends CHNV Legal Status: The United States announced it will terminate legal protections for approximately 532,000 migrants from Cuba, Haiti, Nicaragua, and Venezuela who entered under the CHNV humanitarian parole program initiated in 2022. The Department of Homeland Security stated the parole was always intended to be temporary, and affected individuals must leave the country by April 24 unless they obtain another legal status. Critics, including immigrant rights groups and legal experts, condemned the decision as a breach of commitments made to migrants and their sponsors, warning of widespread legal and humanitarian consequences. Only a small fraction of CHNV participants have applied for asylum, leaving most vulnerable to deportation and loss of work authorization. The move aligns with President Donald Trump’s broader immigration crackdown, which includes deportation efforts and controversial international detention arrangements.10
IRS May Share Data With ICE: The Internal Revenue Service is nearing an unprecedented agreement to allow Immigration and Customs Enforcement access to taxpayer data for immigration enforcement, according to officials familiar with the matter. The proposed deal would permit ICE to verify names and addresses of individuals with final removal orders using IRS records, raising significant concerns among career tax officials about privacy law violations. Historically, the IRS has assured undocumented immigrants that filing taxes would not expose them to deportation, with many using Individual Taxpayer Identification Numbers (ITINs) to remain compliant. The shift comes as the Trump administration intensifies its mass deportation efforts and dismantles internal DHS oversight bodies that advocate for migrants. The agreement, if finalized, would represent a major departure from decades of practice separating tax administration from immigration enforcement.11
Trump Reaches Deal With Law Firm: President Donald Trump announced an agreement with Paul, Weiss, Rifkind, Wharton & Garrison LLP to rescind an executive order that had targeted the firm over alleged political bias. Under the deal, the firm pledged to provide $40 million in legal services supporting Trump-backed initiatives and to cease the use of diversity, equity, and inclusion (DEI) policies in hiring. The agreement followed a White House meeting between Trump and firm chairman Brad Karp, who also acknowledged the actions of former partner Mark Pomerantz, though Pomerantz denied wrongdoing. Legal experts expressed concern over the precedent set by the agreement, which they viewed as an unprecedented capitulation to executive pressure. The move is part of Trump’s broader campaign targeting law firms seen as aligned with Democratic causes or involved in investigations against him.12
Americans Abroad Face Rising Scrutiny: Since President Donald Trump’s return to office, U.S. expatriates in countries such as France, New Zealand, the UK, and Canada report increased scrutiny and discomfort in social interactions. Conversations frequently shift to U.S. politics, with questions about Trump’s policies, rhetoric, and global leadership, prompting some Americans to feel compelled to explain or defend their country. The shift reflects growing international unease with Trump’s foreign policy actions, including trade disputes, reduced international aid, and strained alliances. While reactions remain largely polite, many Americans overseas describe a perceptible decline in goodwill and rising anti-U.S. sentiment. Even some Trump supporters abroad acknowledge heightened tensions, noting that public criticism now feels more personal than political.13
Senator Daines Meets Chinese Officials: Republican Senator Steve Daines met with Chinese Premier Li Qiang and other senior officials in Beijing to press for stronger action against the export of fentanyl precursors and to advocate for fairer trade practices. Representing President Donald Trump’s “America First” agenda, Daines emphasized the urgency of halting illicit drug flows and reducing trade imbalances, while also engaging with top U.S. business executives operating in China. Li called for dialogue over confrontation and pledged equal treatment for foreign firms, though he criticized U.S. tariffs and warned of global economic instability. The visit comes amid escalating tensions, with the U.S. having imposed 20% tariffs on Chinese goods and preparing further reciprocal tariffs set to be announced on April 2. Despite Beijing’s assurances, U.S. officials remain skeptical of China’s commitment to enforcement on fentanyl and equitable market access.14