Yardeni's research president Ed Yardeni analyzes new economic data amid the weakness of the market to make money.
A new analysis by the Bank of America Institute shows that small businesses appear to be gaining financial momentum, but tariff-related policy changes could drive inflation and thereby It will be a new challenge to profitability.
The Bank of America Institute report analyzes bank SME account data and in the six months from August to January, SME clients' deposit growth exceeded total payment growth for the first time in three years. I discovered that.
“The positive is that we've seen the first time in the last three years, when revenues are rising and deposits outweigh payments,” he told Fox Business. “But that's what's more, the enthusiasm of SMEs and growth going forward. That doesn't mean there is no risk to the pressure of cost to curb it.”
Inflation has slowed significantly since the 40-year high in 2022, but remains rising, with wage impacts contributing to the continued cost growth of small and medium-sized businesses.
Research shows that uncertainty is still growing among owners of the best SMEs
An analysis by the New Bank of America Institute shows that SMEs arrived in 2025 and that their financial momentum is positive. (Reuters/Brian Snyder/File Photo/Reuters Photo)
“Revenues seem to be on the rise, which is really good because small businesses have historically been operating at a rather small profit margin,” Bowley said. “But one thing is that costs aren't necessarily declining.”
Bowley says that pay is one of the biggest cost categories for small and medium-sized businesses, and pay-related wage inflation may also be a factor in the expansion of the workforce, but the rising costs faced by those companies. He said it was an important factor.
“Wage inflation is not the only driver in terms of what we see in salary growth. It means that small businesses can still maintain their pay and potentially expand their workforce. It shows,” she said.
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Bank of America Institute data shows that despite ongoing costs, SMEs are seeing a rapid increase in revenue, but the inflow ratio (companies view as a proxy for SMEs' profitability) ) showed that it could increase by 1.5% year-on-year. January. That metric was negative last spring, surpassing only 1% in the fall.
Bowley said that bank data currently does not reflect what their impact is as some of the Trump administration's tariff plans are still in liquidity and have not yet been implemented.
Federal officials hamper the risk of rising inflation amid uncertainty over Trump's policy, tariffs
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| bac | Bank of America Corp. | 43.97 | -0.52 |
-1.16% |
She said uncertainty about tariffs makes it difficult for small businesses to identify how they respond in terms of passing these costs to consumers in the form of higher prices.
“Small businesses aren't the same as big companies. Large businesses may have a bit more room in determining how much price increases will be given to consumers, but small businesses are rather small profits. It works at a rate,” Bowley said.
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Bowley says an analysis of Bank of America's Global Research Team currently believes that changes in trade, fiscal and immigration policies are now considered mild inflation, but the impacts of this include tariffs, government spending reforms, and Or, immigration enforcement policies will be implemented, so they will fluctuate between different sectors of the economy.
