It is almost a universal belief that tariffs will increase prices. A major question at hand, after this initial spike, will inflation become persistent? It is also a near universal belief that tariffs will produce a related supply-side “disturbance” that may suppress output and employment. The Federal Reserve is in an incredibly difficult spot. Most … Read more
Is the Treasury Department/Federal Reserve concerned that the yield curve could become “unglued?” In recent Congressional Testimony from Treasury Secretary Scott Bessent, Bessent stated it is “top priority” that Federal Reserve/Treasury does not lose control of the yield curve, a yield curve that has been perhaps artificially suppressed by Central Bank policies over the past … Read more
As widely expected the Federal Reserve held interest rates steady for a third straight meeting and emphasized they see a growing risk of both higher inflation and rising unemployment, stating “uncertainty about the economic outlook has increased further.” The statement is not a surprise as the President’s trade policy has unleashed a wave of uncertainty … Read more
It is widely accepted the FOMC will not alter monetary policy today. The post meeting statement will be scrutinized to the umph degree in attempt to discern monetary policy direction. The odds are high that FRB Chair Powell may state the outlook is filled with uncertainty and monetary policy decisions may continue to focus upon … Read more
The volatility and the sensationalist narrative are incredible. Two weeks ago, the financial markets were imploding and the world as we know it was going to come to an end. Two weeks later, S & P posted its longest winning streak in more than 20 years. The data is not suggesting a financial apocalypse is … Read more
The ISM Manufacturing Index surprised on the upside. The data was not as weak as forecasted and prices did not climb as much as expected. The headline number did fall by the most in five months, however it was considerably stronger than expected almost matching last month’s data. The “New Order Index” was also considerably … Read more
The economy contracted at the start of the yar for the first time since 2022 on monumental pre-tariffs import surge. Initial estimates of first quarter GDP decreased at an annualized 0.3% rate in the first quarter, well below average growth of about 3% in the prior two years. Net exports subtracted a record 5% from … Read more
Initial estimates for first quarter GDP is released at 8:30. Will this data be insignificant given that the statistics were collected largely before the tariffs went into effect? Inventory accumulation is a positive addition to GDP. Inventory reduction is negative. Imports are negative to GDP and exports are positive addition. Yesterday’s trade data indicated a … Read more
Is the Administration using the threat of tariffs to manipulate the dollar to make US products more attractive abroad and foreign products more expensive at home? A dollar gauge is on track for its worst performance during the first 100 days of a presidency in data going back to the Noxon era when the US … Read more
This week has a number of events/releases that could influence the intermediate direction of the markets. Not in any particular order, META and MSFT report results on Wednesday, followed by AAPL and AMZN on Thursday. Writing the incredibly obvious, these are four of the largest companies in the world and their results could considerably influence … Read more
