Trump, Powell And Rates: The Pre-April 2nd Edition

2025-03-26 14:16:00 ET

Summary

• With the April 2nd tariff deadline approaching, markets are eager to see if the Trump Administration signals a more targeted - but still impactful - approach to trade policy.
• Despite not cutting rates in March, the Federal Reserve is signaling a cautious stance, balancing modest inflation risks with downside growth concerns driven by policy uncertainty.
• Treasury yields remain elevated amid conflicting signals, with markets pricing in slower growth that is still vulnerable to headline-driven reversals in Q2 and beyond.

By Kevin Flanagan & Samuel Rines

As the first quarter comes to a close, there is one word that has become the new go-to term to describe the investment backdrop: uncertainty. For part two of our blog series on the topics at hand, we’ll try to limit our use of this exact word but make no mistake—it will continue to have an impact on the macroeconomic outlook, Fed policy, and, of course, the stock and bond markets. With the April 2 ^nd tariff announcement date looming, the question that comes to our mind is whether today’s anxieties will actually come to fruition and whether the markets have already discounted, at least to a certain extent, the actual news that will hit the tape....

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