Week In Review

Front and center in economic news this week was the increasingly public conflict between President Trump and Fed Chair Jerome Powell. Despite calling the Fed Chair a "major loser" and claiming his exit can't come soon enough, the president said this week he has "no intention" of firing Powell. There's not a clear opinion as to whether or not Trump could actually fire Powell (who was appointed by Trump during his first term), but the public criticism of the Fed in the last few weeks has contributed to the volatility in the markets. The Federal Open Market Committee (FOMC) meets next on May 7 and will likely announce no change in interest rates. As of today, the market has priced in the next rate cut coming at the June 18 meeting (according the the CME FedWatch Tool). Beyond that, it's difficult to predict what monetary policy will look like. There's just too many uncertainties between how long tariffs will be on, what, if any, inflationary impact they will have, how all of this may impact the labor market, and if we are headed towards a recession. As we stated in a recent post, for now, the labor market remains strong, and it's hard to imagine a recession where we aren't seeing an increase in jobless claims or a falloff in job creation numbers. Inflation appears under control, and the Fed remains positioned to take its time and react to the data. We'll get a look at the April job numbers next Friday, May 2.