May 2025 saw a shift in the global landscape: the U.S. economy contracted, Moody’s downgraded U.S. debt, and trade tensions eased with delayed tariffs. Equity markets rallied, especially in Europe and North America. Friedrich Merz became Germany’s new Chancellor, Pope Leo XIV was elected, and bond yields rose as markets reacted to fiscal concerns and central bank signals.

President Trump’s sweeping tariffs and public attacks on the Federal Reserve rattled markets and global allies in April 2025. His increasingly autocratic rhetoric added to geopolitical unease. Tesla reported a sharp earnings slump, hit by reputational backlash tied to Musk’s political ties. Meanwhile, U.S. consumer confidence dropped to a 13-year low, reflecting growing economic and political uncertainty.