- A mixed bag out of jobs and unemployment data followed by shockingly high one-year inflation expectations ravaged markets on Friday. Trump’s tariff talk seems to be more than bluster so far which could lead to a repeat of 2018 when the market largely went nowhere before ending the year down over 7%.
- Poor productivity data for Q4 2024 had me further concerned that expectations for generative AI may be overblown. While it’s still too early to tell, I’ll be keeping an eye out for further signs of deterioration in this part of the economy.
- Internationally, stimulus was afforded markets in the form of a cut from the Bank of England. With the Fed determined to hold steady, the dollar may rally over the short term, further hindering risk markets.
- Next weeks CPI and PPI data will be critical in determining the degree to which the Fed is likely to remain hawkish. With the reverse repo facility nearly winded down, I expect an announcement to end balance sheet roll-off sometime in the coming mont
