May began with a Federal Reserve still concerned with the broader implications of tariffs that were unveiled April 2 and then amended on an ad hoc basis. While Fed officials were contending with concern over sticky inflation from broad-based tariffs, the Trump administration on May 12 announced a 90-day pause on China tariffs, which sent the U.S. equity market, as measured by the S&P 500 Index, up 3.27% on the day. This marked shift in tone from the White House ultimately drove risk assets higher for the month. At the same time, Republican lawmakers continued work on the “One Big Beautiful Bill,” a budget plan projected to increase the federal deficit and that includes provisions to raise the debt ceiling.
