Investors Should ‘Stay the Course,’ Says Northwestern Mutual CIO

Markets ended the week lower amid renewed trade tensions between the United States and China, but Northwestern Mutual’s chief investment officer, Brent Schutte, urged investors not to react rashly to short-term volatility.

“Whatever happens in the coming weeks and months, we advise investors to stay the course with a long-term, diversified strategy,” Schutte said in his latest weekly commentary note.

President Trump’s threat of a 100% tariff on Chinese products and new export controls has heightened uncertainty, with the average U.S. tariff rate now at 17.9%, the highest since 1934.

Schutte warned that the longer-term effects of tariffs “may continue to emerge in the coming months” as the economy adjusts.

He noted that while headline growth remains strong, with the Atlanta Fed forecasting 3.8% GDP growth in Q3, signs of strain are emerging in the labour market, where participation is weakening and job demand is slowing.

“You can’t have negative job growth and 4 percent GDP growth,” Schutte quoted Federal Reserve Governor Christopher Waller as saying.

Meanwhile, the ongoing U.S. government shutdown is said to be shaving an estimated 0.1 to 0.2% off GDP each week, delaying key data releases such as the jobs report and complicating the Federal Reserve’s policy decisions.

Despite elevated inflation expectations and weak consumer sentiment, Schutte said investors should avoid chasing narrow market trends, pointing to parallels with 1999.

“Investors should avoid the urge to concentrate in any one part of the market,” he said, adding that leadership is likely to broaden as AI benefits spread across industries and undervalued Small- and Mid-Cap stocks regain favour.