The Wizard Of 'Pause'

2025-05-12 10:45:00 ET

Summary

• The Fed held interest rates steady last Wednesday with a benchmark rate of 4.25-4.50%.
• Officials at the Fed described their outlook as fuzzy and clouded by policy uncertainty. The Fed is in a holding pattern, but they’re bracing for signs of fallout.
• While it’s broadly accepted that tariffs will push prices higher, the depth and duration of that inflation remains uncertain.
• Actual data haven’t yet shown a serious impact from the tariffs, but officials say that sentiment is flashing red.

We often see articles blaming, or congratulating, President Trump for his impact on the economy and the markets. However, he isn’t the only one with the large hammer that is affecting both the stock and bond markets. Jerome Powell is also on the carpet uttering “pause” and “wait and see” as if he was standing on some pulpit and extolling the current virtues of our central bank....

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