3 Things You Need to Know This Week |Q4 2025 GDP, Fed Minutes, Tariff Court Decision

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Ben Thistlethwaite:

Hello and welcome to 3 Things You Need to Know This Week. This is our regular series designed to help you sift through the noise across financial media and understand what really matters for markets.

To stay up-to-date with our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. And with that, here are three things you need to know this week.

First, US fourth quarter 2025 GDP.

This week, the US Bureau of Economic Analysis will release its initial estimate for Q4 '25 GDP. This comes on the heels of a strong third quarter, where the US economy grew at an annualized rate of 4.4%, the fastest pace since Q3 of 2023 and well ahead of expectations.

So, the big question now is can this momentum continue? While some feared that tariffs may weigh on GDP, those concerns really haven't materialized. And as we've noted before, tariffs are often more bark than bite. Businesses have proven very resilient, finding creative ways to adapt— like rerouting trade or relabeling products—in order to minimize the impact of tariffs on growth. Additionally, imports and exports make up a smaller portion of US GDP than many may realize.

It's important to remember that GDP is also a backward-looking metric, reflecting what has already happened. For a more forward-looking perspective, investors should focus on leading indicators like purchasing managers' indexes, or PMIs.

In January, US services, manufacturing, and composite PMIs all signaled continued expansion. These indicators, along with other data, suggest the US economy remains on solid footing and we expect this trend to continue.

Next, Fed meeting minutes.

On Wednesday, the US Federal Reserve will release minutes from its January policy meeting, where it kept rates steady for the first time since last July. Many investors evaluate these meeting notes for potential clues about what Fed officials might do next.

The January decision to hold rates steady was widely expected, but it wasn't unanimous. Fed Chair Jerome Powell signaled that officials are comfortable with the current pause, suggesting that further cuts may be unlikely without new signs of labor weakness or clear progress on inflation. But some have highlighted the fact that two governors favored a rate cut, highlighting a rare split within the committee.

It's also worth noting there's an important political context surrounding this decision. These Fed minutes may receive additional scrutiny, tied to the increased pressure from the White House on the Federal Reserve to cut rates faster and the looming leadership changes.

But it's important to maintain perspective. Predicting the central bank's next moves can be futile. Officials noted they may adjust their stance based on incoming data, meaning that today's stability could change tomorrow.

It's also worth remembering that monetary policy is just one factor influencing markets. The effects of monetary policy aren't predetermined, and trying to time the market based on Fed speculation can really detract from investors' long-term returns.

Finally, the US Supreme Court tariff case.

The US Supreme Court reconvenes this week and could decide the fate of President Trump's tariffs as soon as Friday. They'll determine if Trump's use of the International Emergency Economic Powers Act to impose the tariffs was legal.

Notably, a lower court determined that the Trump administration may have needed approval from Congress before implementing tariffs. If the justices rule the tariffs are illegal, US companies could be eligible for billions of dollars in refunds.

Now, the mechanics remain unclear, but a ruling against the Trump administration could force the government to refund over $130 billion in tariff revenue, potentially impacting trade deals struck since April of 2025.

Despite the potential for refunds, experts caution that the process will not be immediate and will definitely not be simple. And the administration has indicated it may simply replace the tariffs with new levies under different legal authorities.

So, although this ruling will certainly generate headlines, we expect the impact on the broader economy and markets to be minimal. Markets generally pre-price widely known information and investors have anticipated these results. Even if the court issues an unfavorable ruling for the administration, any negative fallout really shouldn't last that long. If the tariffs stay in place, businesses have already learned how to adapt.

And in a related development, the GOP-led House recently passed a resolution to roll back President Trump's tariffs on Canada. This resolution is unlikely to override a presidential veto, but it highlights the challenges that the administration could face in passing any future tariffs through Congress if the court does in fact limit Trump's ability to impose tariffs himself.

And that's it for 3 Things You Need to Know This Week.

For more of our thoughts on markets, check out This Week in Review. It's released every Friday. You can also visit FisherInvestments.com.

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