World uncertainty and trade uncertainty rising

 

The World Uncertainty and Trade Uncertainty Indices are both showing increases over the last quarter consistent with the new era of Trump. The uncertainty is nowhere near the levels seen during the first Trump Administration, but we are early in the process of determining what will be the policy actions. The World Uncertainty index is pushing to levels seen during the first Ukraine War, yet the level of uncertainty is not near the Brexit levels. 

While this index may not help with trades, it does provide information on how to adjust asset allocation. Higher uncertainty will create an environment that should be focused on holding cash and lower risk assets. The range of possible returns should be widened for 2025.