Weekly Economic Commentary

The debate over whether the economy is responding more to tariffs or interest rates will undoubtedly heat up, as the week’s busy calendar of data only added fuel to the fire. One thing is clear: following Friday’s jobs report, the financial markets dramatically repriced the odds of a rate cut in September, giving it more…

We are entering the dog days of summer, and the oppressive heat and humidity are, on schedule, buffeting the weather-weary victims of Mother Nature. Another target taking the heat is Federal Reserve chair Powell whose refusal to cut interest rates is drawing withering criticism from President Trump. Unfortunately, Powell cannot escape to an airconditioned room,…

Once again, the U.S. economy is showing that it is not ready to roll over in the face of higher tariffs and other distractions that many thought would be taking a more damaging toll by now. Nor does it seem to be in the grips of a tariff-induced inflationary spiral about which the headlines have…

The on-again, off-again tariff threats were in full display this week, as President Trump once again postponed the levies that were scheduled to take effect on July 9, giving trading partners a reprieve until August 1 when the next escalation is set to go into effect. Whether or not market participants have become inured to…

A confusing economic backdrop got a bit more muddled on Thursday, thanks to a jobs report that featured topline strength overlaying a softer underbelly. For a data-dependent Fed, the task of navigating the economy through the statistical crosscurrents did not get any easier. About the only decision that is no longer in doubt is whether…

Judging by the performance of the financial markets, the sun is shining brightly on the economic landscape. Stock prices are racing to new highs, bond yields are falling, and investors are snapping up new corporate and Treasury issues with abandon. For the moment, the angst and handwringing over tariffs, the imbroglio over tax and spending…

The Federal Reserve’s policy meeting this week yielded more questions than answers for the market to digest. As expected, rates were kept unchanged for the fourth consecutive meeting, leaving the federal funds rate at 4.25-4.50 percent. Also, as expected, the median rate forecast of the 19 members of the policy-setting committee remained unchanged from March,…

The Federal Reserve has long insisted that its policy decisions are data dependent, not forecast dependent. For the most part, the mix of data since it paused the rate-cutting campaign in January has justified that strategy. The economy has held up well, with unemployment hovering around historical lows, at 4.2 percent, while inflation has remained…

It may be the calm before the storm, but the markets are heaving a big sigh of relief that the chaotic tariff policy, heightened uncertainty and downbeat household confidence have yet to do significant damage to the job market. True, job growth is slowing, which is to be expected for a number of reasons. An…