Company: ADAMM
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001273685-25-000047
Chunk: 90

Company: ADAMAS TRUST, INC.
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 1
Chunk 90
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 which could negatively impact the value of credit investments.

The tight U.S. labor market seen in 2024 continued into the first quarter of 2025 with stronger than expected job growth, although increases in the labor force participation rate, in part, drove the unemployment rate marginally higher. According to the U.S. Department of Labor, the U.S. unemployment rate was 4.2% at the end of March 2025, finishing up slightly from the unemployment rate of 4.1% as of the end of December 2024. The number of unemployed persons increased by 0.5 million year-over-year to 7.1 million as of the end of March 2025. There continues to be a disparity between the number of available job openings, 7.6 million as of the end of February 2025, and the number of unemployed persons, resulting in a competitive labor market and rising wages. As of March 2025, average hourly earnings for all employees on non-farm payrolls rose 3.8% year-over-year.

After raising the target range for the federal funds rate a total of 5.25% in 2022 and 2023, bringing the range to its highest level in over 22 years, and holding the range at that target for 14 months, the Federal Reserve cut the target range three times in 2024 for an aggregate reduction of 100 basis points. In considering additional adjustments to the target range for the federal funds rate, the Federal Reserve stated that it will carefully assess incoming data, the evolving outlook, and the balance of risks to the Federal Reserve’s dual mandate of achieving maximum employment and inflation at a rate of two percent over the longer run. In its March 2025 statement, the Federal Reserve acknowledged that uncertainty around the economic outlook had increased and that inflation remains somewhat elevated. Such economic uncertainty and elevated inflation along with recently implemented U.S. tariffs have led some market commentators to suggest that the Federal Reserve is likely to make fewer or smaller cuts, if any, to the target range for the federal funds rate in 2025. Higher interest rates tend to put pressure on our investments, mortgage borrowers, tenants, our operating partners, our financing and capital costs and economic growth generally.

82

After receding in 2024, fears of an economic recession in the U.S. resurfaced in the start of 2025 due in part to the Trump administration’s tariff and trade policies. The National Bureau of Economic Research defines a recession