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…
With the courts echoing President Trump’s on-again, off-again tariff decrees, the only sure thing the markets can count on is that the prolonged period of uncertainty is poised to continue. For now, Trump’s latest iteration of tariffs remains in effect thanks to the appeals court ruling on Thursday pausing a lower court order that would…
The highlight of the week once again came out of Washington, and this time it did not only involve tariffs. On Thursday, House Republicans narrowly passed a major reconciliation bill to deliver President Donald Trump’s economic agenda. However, it’s up to Senate Republicans to craft their own version, which will likely differ from the House…
The stagflation case lost some credibility this week, as fresh data revealed an economy that remains resilient and an inflation backdrop that is once again cooling. Meanwhile, tariffs continue to dominate the headlines, highlighted by a d’tente between the U.S. and China that dialed back the onerous reciprocal levies before the ink on their announcements…
The Federal Reserve’s policy meeting took center stage amid a light data calendar this week. With no quarterly projections to mull over (the next Summary of Economic Projections will be released at the June 17-18 meeting) and no rate changes expected, the markets were laser focused on messaging, emanating from both the policy statement and,…
Despite ominous signs of a slumping economy, linked to tariff anxiety, the supporting evidence has yet to appear. True, the broadest measure of the economy’s overall performance in the first quarter suggests otherwise as GDP contracted for the first time in three years. But besides being backward looking that headline figure is also misleading as…