The “Liberation Day” tariff announcement took markets by surprise, and the response was sharply negative.

By nearly every fundamental metric, the U.S. economy had a stellar year in 2024. Latest estimates suggest real GDP likely grew 2.8% last year (which is above trend), inflation fell to 2.4% year-over-year in November, productivity in the private sector increased by more than 2%, and S&P 500 operating earnings increased by 9%.

Stocks followed.