Commentary

Amid tariffs and market risks, we’re not seeing a crisis

Market volatility remains elevated, but we’re not seeing historically high systemic risk.

By: Anu Gaggar Brad Pineault
Updated: 4/28/2025
Key Takeaways
  • In the past, systemic risk measures have provided early cues of equity market volatility, especially ahead of the Global Financial Crisis of 2007–2009. In April, we are not seeing these types of cues.
  • Recent U.S. tariff announcements have led to a minor increase in overall systemic risk, but not to levels seen during other recent risk events, such as the start of the COVID-19 epidemic.
  • Financial leverage appears to be in check, credit spreads have not widened to alarming levels, and the financing of U.S. government debt has continued without major hiccups.
  • For long-term investors, the lack of historically high systemic risk and the amount of pessimism already priced into the market may suggest waiting out the near-term equity market volatility.
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