Fed Tensions Create More Market Uncertainty
April 21, 2025
As the markets observed the holiday on Friday, we hope the long weekend offered a brief but welcome pause. The United Kingdom, Europe, Hong Kong and Australia are among major world markets that are closed today, which set the stage for thin liquidity in overnight trading. Unfortunately, U.S. markets are opening softer this morning, and the treasury curve is steepening as investors demand more term premium (in real time, the 30-year is up almost 10 basis points to 4.9%).1 Gold continues its move to new highs, currently over $3,400 an ounce.2 Markets continue to price in more uncertainty around tariffs and are concerned about the tension between President Trump and Federal Reserve (Fed) Chair Powell. On Friday, National Economic Director Hasset said the White House was studying if the Fed Chair could be fired.3
The U.S. leading economic indicators report is expected later today along with one Fed speaker, Goolsbee.4,5 Other key economic events this week include the flash purchasing managers’ index (PMI) reports for April and Fed Beige Book on Wednesday along with the final Michigan sentiment report for April this Friday.6 Potential trade discussions and headlines are anticipated during the International Monetary Fund (IMF) and World Bank Spring meetings, which will be held this week in Washington, D.C.7 Earnings season is well underway, and we will continue to monitor any guidance and insight into how companies are navigating all of the uncertainty.
Sources
1CNBC – 30 Year Treasury Yield; as of 4/21/25
2Reuters – Dollar weakness, trade worries push gold to $3,400 mark; 4/21/25
3Reuters – Trump studying whether to fire Fed Chair Powell, adviser says; 4/18/25
4,6MarketWatch – U.S. Economic Calendar; as of 4/21/25
5Investing.com – Fed’s Goolsbee speech, IMF meetings highlight Monday’s economic calendar; 4/18/25
7Yahoo! Finance – Tariff deal talks to dominate IMF-World Bank meetings this week; 4/21/25
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