If we were to define the first quarter of 2025 in a single word, it would definitely be uncertainty. David Ingles, Chief Markets Editor at Bloomberg, just published a chart on his X account showing the United States Categorical Economic Policy Uncertainty Index in the last 40 years. The chart speaks for itself. It went vertical.
US EPU Index
Here you can find an explanation on how the index is constructed. Basically, they perform monthly searches of each paper for terms related to economic and policy uncertainty. In particular, searches for articles containing the term ‘uncertainty’ or ‘uncertain’, the terms ‘economic’ or ‘economy’ and one or more of the following terms: ‘congress’, ‘legislation’, ‘white house’, ‘regulation’, ‘federal reserve’, or ‘deficit’.