Power and Progress, and the End of History

March 24, 2025

Financial Markets

U.S. equity markets ended the week with modest gains despite notable volatility. Investor sentiment was tested throughout the week by geopolitical developments, ongoing tariff discussions, and the aftermath of the latest Federal Reserve meeting.

Rather than reacting to fundamental economic data, markets were more responsive to the latest pronouncements from President Trump. His evolving stance on trade policies, especially tariffs, continues to unsettle global markets and introduce unwanted uncertainty. As we’ve noted in previous editions, markets tend to react poorly to uncertainty, and that remains the case today. Investors are currently navigating a landscape shaped by forces not present in recent decades, as broader political and technological shifts converge.

Economics

Over the long run, economic fundamentals guide financial markets. Since the mid-18th century, capitalism—championed by philosophers and political economists like Adam Smith, David Hume, and John Locke—has been a driving force for global economic development. Post–World War II, these ideas gained even more traction. By the mid-1950s, scholar Francis Fukuyama famously argued in The End of History and the Last Man that liberal democratic capitalism might be the final form of human government and economic organization. Later, Nobel Prize–winning economist Milton Friedman insisted that a corporation’s primary obligation is to its stockholders.

But the world has changed. Today, rapid technological progress and growing political polarization have challenged conventional assumptions. The popularity of figures like Donald Trump and Bernie Sanders reflects rising dissatisfaction with the status quo. Likewise, the 2024 Nobel Prize in economics was awarded for work suggesting that economic models must evolve to account for the growing influence of technology.

Back to the present. The U.S. economy remains solid, though growth has been slowing. Employers continue to add jobs, but the ongoing unpredictability in policy—especially around tariffs—may eventually slow new projects and hiring, raising the risk of a more pronounced slowdown.

Tariffs remain a critical concern. They create inflationary pressure by raising input costs, while simultaneously dampening demand—an unusual combination that puts the Federal Reserve in a difficult position. While both the Fed and the President have signaled a preference for lower interest rates, tariff-driven inflation could limit the Fed’s flexibility.

Conclusion

“The Times They Are A-Changin” – Bob Dylan

Welcome to the techno-economy. This report is not a warning but rather an invitation to think differently about how modern economies function. Technological disruption and geopolitical instability are not just temporary factors—they are reshaping the economic landscape in real time. While the future is uncertain, remaining vigilant and adaptable will be critical. The interaction between politics, technology, and economic fundamentals will define the investment environment for years to come.

I. Front End Disclosure

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of 1919 Investment Counsel, LLC (“1919”). This material contains statements of opinion and belief. Any views expressed herein are those of 1919 as of the date indicated, are based on information available to 1919 as of such date, and are subject to change, without notice, based on market and other conditions. There is no guarantee that the trends discussed herein will continue, or that forward-looking statements and forecasts will
materialize.

Statements concerning financial market trends or portfolio strategies are based on current market conditions, which will fluctuate. There is no guarantee that these investment strategies will work under all market conditions or are appropriate for all clients and each client should consider their ability to invest for the long term, especially during periods of downturn in the market. No representation is being made that any account, product, or strategy will or is likely to achieve profits, losses, or results similar to those shown.

All investments carry a degree of risk and there is no guarantee that investment objectives will be achieved.

This material has not been reviewed or endorsed by regulatory agencies. Third party information contained herein has been obtained from sources believed to be reliable, but not guaranteed.

There is no guarantee that employees named herein will remain employed by 1919 for the duration of any investment advisory services arrangement.

1919 Investment Counsel, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission. 1919 Investment Counsel, LLC, a subsidiary of Stifel Financial Corp., is a trademark in the United States. 1919 Investment Counsel, LLC, One South Street, Suite 2500, Baltimore, MD 21202. ©2025, 1919 Investment Counsel, LLC. MM-00001681

II. Investment Analysis

The information shown herein is for illustrative purposes. 1919 may consider additional factors not listed here or consider some, but not all, of the factors listed here as appropriate for the strategy’s objectives.

There is no guarantee that desired objectives will be achieved. 1919 has a reasonable belief that any third party information used for investment analyses purposes is reliable but does not represent to the complete accuracy of such information by any third party.

III. Portfolio Composition

For illustrative purposes. There is no guarantee that the portfolio composition for the strategy discussed herein will be comparable to the portfolio shown here.