Chair Powell made clear in his post-meeting press briefing that the Fed will not adjust policy preemptively given the uncertain effects of tariffs on growth, employment and inflation. There is another source of uncertainty for investors, however: how the Fed will react to economic outcomes that are likely to create tensions for monetary policy, namely, weaker growth and employment on the one hand, and higher inflation on the other. We believe there is an opportunity for the Committee to more clearly articulate its framework for adjusting policy in such a scenario.

The introduction of global tariffs by the Trump administration represents a fundamental shift in the international economic order. If sustained, the tariffs not only risk a US recession, but will also lead to a costly and laborious rewiring of global supply chains. In the latest edition of Forward Guidance, Steven Friedman and Michael DePalma discuss the market reaction to recent tariff news, opportunities in US and global credit markets, and guiding principles for managing portfolios in periods of market volatility.

From the March FOMC statement, to the Committee’s latest economic projections, to Chair Powell’s press briefing, the word of the day is “uncertainty.” Still, markets took a dovish signal from the suite of communications, with equities continuing to rally after the meeting, the Treasury curve bull steepening, and the DXY dollar index declining further. The latest projections show only a temporary effect of tariffs on the economy, and inflation in particular. This allows the Committee to stay on the rate cut path it laid out in December, including a median projection of 50 basis points of easing this year.

It has been a whirlwind of economic policy pronouncements over the first few weeks of the Trump administration. In the latest edition of Forward Guidance, Steven Friedman and Michael DePalma cut through the noise and focus on one key aspect of President Trump’s policy agenda – import tariffs and their likely impact on the economy and fixed income markets. They also touch on investing amid policy uncertainty, and relations between the administration and the Fed.

On the latest episode of Forward Guidance, Steve Friedman and Michael DePalma discuss the drivers behind the run-up in Treasury yields in Q4 and into early January, and how this impacts the opportunity set in fixed income markets. They also touch on the California wildfires, as well as the monetary policy outlook and investment opportunities in the euro area.

It is not my base case that the easing cycle is over, but it is understandable why markets are now pricing in some probability of that outcome. Committee participants marked higher their inflation projections and the policy rate path. And the discussion during the press briefing around the incoming Trump administration implies that the rate path could be marked up further should the trade, immigration and fiscal policy preferences of the new administration come about

In the latest episode of Forward Guidance, Steven Friedman and Michael DePalma discuss their views on how investors can navigate the fixed income market post US election.

In our latest episode of Forward Guidance, Steven Friedman provides a brief synopsis of the November FOMC meeting, including Chair Powell’s slightly dovish press briefing, before offering some early thoughts on the economic implications of the election. There has been much attention on potentially outsized changes to fiscal, trade and immigration policy. But Steven believes some of the polices as implemented will turn out to be more constrained than advertised.

Steven & Michael debate if China's recent policy moves mark a major shift, the US economy's strength post-CPI print and its market implications amid a swift narrative shift from recession to reflation.

Steven & Michael discuss whether a heightened market volatility presages a major outlook shift or will it recede back to normal amid August’s market swings.

Steven & Michael discuss carry environment continuation as easing cycle comes to focus, in relation to housing & investing amidst election uncertainty.

Steven Friedman & Michael, discuss the asymmetric risk profile for Treasury yields and more.

Steven & Michael, provide their outlook for credit markets against a backdrop of solid growth and high interest rates.