Moe’s Market Memo

By Hightower St. Louis on May 2, 2025

Weekly data-driven insights on the markets and economy

Fifth Week of April 2025

GDP growth dips

The U.S. economy contracted at an annualized rate of 0.3% in the first quarter of 2025, marking the first negative growth since Q1 of 2022. This decline, reported by the Commerce Department on Wednesday, was driven by a surge in imports and a decrease in federal government spending, despite increases in investment, consumer spending, and exports. Economists had initially expected a GDP gain, but the unexpected rise in imports due to new tariffs led to a downturn.[i]

Bond rate boost

On Wednesday, the U.S. Department of the Treasury announced that newly purchased Series I bonds will pay a 3.98% annual interest from May 1 through October 31, up from the previous 3.11% yield. This new rate includes a variable portion of 2.86% and a fixed portion of 1.10%, which is down from the 1.20% fixed rate announced in October. Despite the decrease from the record high of 9.62% in May 2022, the fixed-rate portion may still appeal to long-term investors.[ii]

Trump eases auto tariffs

President Trump signed an executive order on Tuesday to soften some automotive tariffs, maintaining the 25% tariff on imported vehicles but aiming to reduce the overall tariff level by addressing the “stacking” effect of multiple levies. The order allows vehicles assembled in the U.S. to qualify for partial reimbursements on the additional 25% tariffs on auto parts for two years. This move follows lobbying from automakers and policy groups seeking relief from the compounded costs of tariffs.[iii]

Student loan shake-up

On Tuesday, House Education and Workforce Committee Republicans introduced the Student Success and Taxpayer Savings Plan to overhaul the student loan and financial aid system. The plan includes caps on federal student loans and fewer repayment options, which consumer advocates warn could worsen the affordability crisis by restricting financial aid and eliminating key borrower protections.[iv]

March JOLTS: Stable labor market 

According to the March Job Openings and Labor Turnover Survey report, U.S. job openings dropped last month by 288,000 to 7.192 million while layoffs fell by 222,000 to 1.558 million, indicating a stable labor market despite tariff uncertainties. Economists expect tariffs to impact the labor market in the coming months, with a hiring freeze and federal worker layoffs anticipated.[v]

Marriott acquires citizenM

Marriott announced on Monday it will acquire Netherlands-based hotel chain, citizenM, for $355 million, adding 36 hotels in more than 20 cities to its portfolio. The company now expects full year 2025 net rooms growth to approach 5 percent. This deal will accelerate Marriott’s global expansion in select-service and lifestyle lodging offerings.[vi]

Mohammad Abouchleih, MBA, CIMA®

Investment Analyst

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[i] Cox, Jeff. “U.S. economy shrank 0.3% in the first quarter as Trump policy uncertainty weighed on businesses.” CNBC, 30 April 2025, https://www.cnbc.com/2025/04/30/gdp-q1-2025-.html. Accessed April 30, 2025.

[ii] Dore, Kate. “Treasury Department announces new Series I bond rate of 3.98% for the next six months.” CNBC, 30 April 2025, https://www.cnbc.com/2025/04/30/treasury-i-bond-rate-through-october-205.html. Accessed April 30, 2025.

[iii] Wayland, Michael and Luhn, Michele. “Trump signs order easing some auto tariffs.” CNBC, 30 April 2025, https://www.cnbc.com/2025/04/29/trump-auto-tariffs.html. Accessed April 30, 2025.

[iv] Nova, Annie. “Republicans release plan to overhaul student loan system, slash repayment plan options.” CNBC, 29 April 2025, https://www.cnbc.com/2025/04/29/student-loan-overhaul-by-gop-to-slash-repayment-plans-limit-borrowing.html. Accessed April 30, 2025.

[v] “US job openings fall in March; layoffs decline.” Reuters, 29 April 2025, https://www.reuters.com/business/world-at-work/us-job-openings-fall-march-layoffs-decline-2025-04-29/. Accessed April 29, 2025.

[vi] McColl, Bill. “Marriott Buys Lifestyle Brand citizenM, Sees Net Room Growth Boost.” Yahoo, 28 April 2025, https://finance.yahoo.com/news/marriott-buys-lifestyle-brand-citizenm-142749085.html. Accessed April 29, 2025.