Good Thursday AM from your Hometown Lender,
Bonds are having a tough time moving positive this morning.
The data today was mixed but the bigger issue is that the bond market will close in about an hour and will be closed tomorrow for Good Friday. The unknowns (tariffs) continue to have huge implications, and markets will consolidate ahead of the closing. Bonds are off about 25bps and the 10-yr is at 4.33%.
Federal Reserve Chair Jerome Powell warned yesterday at the Chicago economics club that the central bank could have less flexibility to quickly cushion the economy from the fallout of President Trump’s trade war. Powell said he saw a “strong likelihood” that consumers would face higher prices, and that the economy would see higher unemployment as a result of tariffs in the short run. This would create a “challenging scenario” for the central bank because anything it does with interest rates to address inflationary pressures could worsen unemployment, and vice versa, he said. “It’s a difficult place for a central bank to be, in terms of what to do,”
Markets are not too comfortable with the Fed Chair’s position.
Neither is President Trump who posted that termination cannot come fast enough and that Powell is always TOO LATE AND WRONG and should be cutting interest rates alongside other central banks (the ECB cut again today for the 7th time in a row). Markets think that Powell and crew are missing the economic recession that is going to happen right under their noses.
Stay safe and make today great!!!
