Daily Economic Update: March 3, 2025

“Have you said ‘thank you’ once? I mean I write this blog everyday and  “..have you said thank you?” in the comments, by carrier pigeon…”what you’re doing is very disrespectful”.  Or was that my recap of the latest on the U.S. efforts to help broker peace in Ukraine.

I started last week with a call to action, share this blog! At that time I also provided ChatGPT’s unbiased review, which you can read here.  It’s only fair that I let Grok provide its review to start this week, right?  Here’s what Grok had to say: “Need a financial fix that doesn’t bore you to death? Where is Edward Quince? at edwardquince.blogspot.com is your spot. It’s got smart, humble takes on markets, Fed moves, and whatever’s hot—tariffs one day, AI the next—all wrapped in satire that hits like a well-timed punchline. Plus, his X Thoughts of the Day pull the wildest bits from the internet’s hive mind. Guy’s been at it since 2023, and it’s criminally underrated.”

Now that Meta is rolling out a new AI chatbot in the second quarter, I’ll have to get its take on the blog. After all, your opinions don’t matter, in the future AI is going to be doing all the reading anyway.  You think I’m wrong, well “You’re in no position to dictate that. You’re in no position to dictate what we’re gonna feel”

I’m going to need this blog to get a lot bigger and have some advertising or something now that I have to deal with stagflation.  

PCE, GDP and Stagflation?

Stagflation is lower real economic growth coupled with higher inflation and following last week’s PCE data and the latest Atlanta Fed GDPNow reading, the idea of stagflation might not be off the table.  

With respect to the PCE report, the Bureau of Economic Analysis reported a very strong reading in personal income at 0.9%, above expectations, and led by a rise in social security income (thanks to COLA) coupled with solid dividend income.  The personal spending component decreased 0.2%, which was worse than expected, with spending on goods, especially motor vehicles leading the decline.  The price index, or PCE, showed a headline annualized year over year rate of 2.5% and a core YoY rate of 2.6%, both declining from the prior reading, but neither at 2.0%.  

The Atlanta Fed GDPNow printed an estimate of -1.5%, with weak net exports and weak consumption driving their downward revisions.  The net exports component is likely related to tariff concerns.  The U.S. Census Bureau’s Advance International Trade Deficit in Goods was the highest goods deficit in history, which is thought to be importing ahead of tariffs.  Beneath the headlines is data indicating that imports of Gold to the U.S. are a major factor in the widening deficit, the imports of Gold being driven by the chance that Gold could be subject to tariffs and physical Gold could be needed to settle futures contracts.  Those economists who really study the data point to this Gold anomaly and note that net imports of Gold do not feed through to GDP as Gold imports are generally unrelated to U.S. production or consumption which is what is measured in the national accounts.  I guess we’ll see.  GDP estimates excluding this anomaly appear to be trending below 2%.

So if we have sticky inflation readings and lower GDP, that doesn’t sound good, it sounds like Stagflation.

It would seem the answer to all our problems is Productivity, a topic we’ve talked about a number of times on this blog, including at the end of January, but my favorite post on the productivity topic can be found here. 

If the 1970s and 1980s are the analogy, maybe we need advice from that era.  In a 1981, Financial Analyst Journal article authored by the NYSE’s then Chief Economist, William Freund, notes: “The key to licking inflation is productivity, and the key to improving productivity is capital investment.” and “Over the long run, real economic growth can come from only two sources - more worker hours and greater efficiency in output per hour.” and “Economic history demonstrates that modernization of plant and equipment, more efficient production processes and better management have accounted for most of the growth in productivity.” 

So with that said we can queue the discussion on AI.  Where is a lot of capex occurring? AI.  Where is the expected increase in productive processes expected to come from?  AI.  What do you think, is AI the answer to stagflation risk?

Recapping February 2025: Stagflation, Tariffs, AI and The Best of XTOD thinking

1. Tariffs: The Gift That Keeps on Taking (From Your Wallet) Remember tariffs? Those things we thought were going away? Surprise! They're back, and this time they're "reciprocal," which apparently means they're just as annoying, but now with a fancy label. News of pausing tariffs on Mexico briefly made the market feel good, because nothing says "economic stability" like a temporary reprieve from added costs on everything you buy. It’s like finding out your root canal is only going to be delayed a week. 

2. The Fed: Guardians of the Galaxy or Just Really Confused? The Federal Reserve, or as I like to call them, the Powell Rangers, continue to ponder the age-old question: to cut or not to cut? Will Trump's policies throw a wrench in their delicate dance of rate adjustments? And what about the "dots"? Are they still a thing? One thing is for sure: trying to predict the Fed's next move is like trying to herd cats while blindfolded. You’re better off reading tea leaves.   

3. Economic Indicators: A Choose Your Own Adventure Novel: Jobless claims are up, but is it noise? The Conference Board’s Leading Economic Index (LEI) is flashing warning signs, but who trusts those guys anyway? The internals indicate a consumer base that is pessimistic. It is as if they are all realizing they have to pay back their credit card debt. CPI reports come and go, each one telling a different story depending on who's spinning it. It’s like trying to navigate using a map drawn by a toddler. Good luck with that soft landing!   

4. AI: The Singularity is Near (or Maybe It's Just a Hype Machine): Ah, AI, the magical elixir that's either going to solve all our problems or turn us into paperclips. Are tech companies overvalued because of AI hype? Is Nvidia the next Pets.com? One thing is clear: everyone is talking about AI, but nobody really knows what it is or what it's going to do. But hey, at least it's not boring.  

5. Market Performance & Valuations: This Time Is Totally Different (Until It Isn't): The S&P 500 is hitting record highs! Time to party like it's 1999! But wait, are we in a bubble? Are valuations too high? Is this sustainable? Don't worry, just keep buying the dip. After all, what could possibly go wrong?

And in our February of less than financial topics:

1. George Carlin Quote: Because He Always Tells It Like It Is: “Think of how stupid the average person is and then realize half of them are stupider than that.” Truer words have never been spoken. This explains so much about the stock market, politics, and most of what you see in public. 

2. Dave Portnoy and $Greed: A Cautionary Tale of Crypto and Hubris: Dave Portnoy(@stoolpresidente) created $Greed and bought 357.92M $Greed (35.79% of the total supply). He sold all $357.92M $Greed in a single transaction, causing the price of $Greed to crash by 99%. And he made ~$258K from $Greed. Next, Dave Portnoy created $Greed2 and currently holds 268.25M $Greed2(26.8% of the total supply). Keep your funds safe and be aware of risks! Is anyone really surprised? In the wild west that is crypto, $Greed is actually an apt ticker. 

3. Looking Back at 2025: A Glimpse into the Future (Maybe): Imagine it’s 2035 and you’re looking back at 2025. What do you think is going to be glaringly obvious by then that isn’t obvious to most people now? Will we laugh at our obsession with meme stocks? Will we marvel at the fact that we used to drive our own cars? Will we even be around to look back at all? Only time will tell.  

4. Questions for Self-Reflection: Because Introspection Is Overrated (Just Kidding): What am I working on and why? Who am I spending time with and why? How well am I treating my body and why? Everything else is noise. Okay, okay, maybe there's something to this self-reflection thing after all. But let's be honest, most of us are too busy doomscrolling to actually answer these questions.

5. LinkedIn Observation: When Did LinkedIn Become OnlyFans? A comparison of LinkedIn to OnlyFans, noting the shift from professional networking to engagement-bait posts and self-promotion. Let's face it, LinkedIn is where professional aspirations go to die. It’s a constant stream of humblebrags, vapid motivational quotes, and people you went to high school with trying to sell you something.

So while we wait for AI to solve stagflation, the Fed to master soft landings, and LinkedIn to stop being weird, at least we can all agree on one thing—no one actually knows what’s going on, but that’s never stopped them from pretending

The Week Ahead:

After the S&P 500 sold off by 5% last week on a “growth scare” narrative, we’ll get the February Jobs report as the highlight of the week ahead.

Today: ISM Mfg, Construction Spending

Tue: Fed Williams

Wed: ISM Services, Factory Orders

Thur: ECB Decision, Jobless Claims, Fedspeak

Fri: Jobs Day and Powell at Chicago Booth

XTOD’s:

XTOD: CouplaBeers  https://x.com/i/status/1896078157398098309

XTOD: A portion of your future tax dollars will go towards buying Cardano.  Let that fucking sink in for a second.

XTOD: If only there was a guy who historically issued “toxic converts” who recently issued debt backed by this “store of value” while simultaneously goosing this very “store of value.”

Get the popcorn.

XTOD: Pure Independence  https://t.co/60y4aRauRg

https://x.com/i/status/1896078157398098309

https://x.com/donnelly_brent/status/1896246604111528443

https://x.com/MarkNeuman18/status/1895439483308503531

https://x.com/morganhousel/status/1895469029453938845

Daily Economic Update: March 4, 2025

Markets in Turmoil? Almost There…

A couple more days like yesterday and we’ll get the obligatory CNBC “Markets In Turmoil” special. Stocks took a beating—thanks to Trump’s 25% tariffs on Canada and Mexico.  The S&P closed down ~1.5%, the Nasdaq ~2.6% and the Russell 2K took the worst with a move down ~2.8%.   

Tariffs on Maple Syrup & Tequila? Time to Crowdfund This Blog

Setting aside the impact to equity markets, maple syrup, chips, salsa, guacamole, and tequila, these are basically the necessary ingredients that go into fueling the writing of this blog. With these tariffs, maple syrup and tequila are now luxury goods. If this blog disappears, check LinkedIn—I’ll be crowdfunding my supply chain. I’m going to have to start a GoFundMe page on LinkedIn to be able to sustain my writing..... Watch me get canceled on LinkedIn for not posting a motivational quote with my fundraiser—‘Tariffs took my tequila, but I rose above!’.

Memecoins to the Rescue? Asking for a Friend

Who am I kidding, whatever problem tariffs cause, I’m fairly confident that a strategic cryptocurrency reserve is of course the answer, right?  Can we just mint a new made in America, TariffCoin, get Dave Portnoy to trade it and throw it in the reserve at an inflated price? Does that juice GDP? Asking for a friend. 

ISM Data: The Stagflation Special

In data yesterday the ISM manufacturing printed lower than expected at 50.3, barely holding onto expansion, with falling new orders, falling employment and rising price components, a whiff of stagflation there, all attributed to, you guessed it, tariffs.  Normally, I’d joke that we don’t make anything here anyway—but at this rate, even jokes about manufacturing might get hit with tariffs.

GDPNow: From Growth to Growth Scare
If you’re into data and use data to forecast GDP, like the Atlanta Fed’s GDPNow (which is just a mathematical model), the recent data hasn’t been inspiring.  As such the Atlanta Fed’s GDPNow, is now -2.8%, which is pretty ugly considering it was over 2% a few weeks ago.  “Growth scare” - If Q1 GDP drops near -3%, shouldn’t we be in full panic mode?

Gold’s Up, TIPs Are In: Stagflation Survival 101

Maybe hoarding gold is the right economic play after all, it was up 1.3% on the day.  Somewhat more seriously TIPs tend to perform well in a stagflation environment as real rates fall and they outperform nominals in such a scenario.

The Fed Cares About Inflation… Kind Of

Inflation isn’t sitting this one out either. We heard from the Atlanta Fed head, Alberto Musalem at NABE, he’s out there worried about rising inflation expectations. “I perceive the risks to inflation as skewed to the upside and am watching near- and longer-term inflation expectations carefully.”  At least someone at the Fed cares about inflation, but with the “growth scare” narrative taking hold, it will be interesting to see if markets pull forward pricing of a Fed rate cut from June into May.

Don’t look now but the 2Y yield is back under 4%, at 3.96% and the 10Y currently feels like it’s a long way from the 4.80% we saw earlier in the year, sitting at 4.16%.

On Deck: Fed Speak & a Prime-Time Address

On the day ahead we’ll hear from NY Fed Williams and we get some quasi State of the Union address in the evening.

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XTOD’s:

XTOD: Current situation:  1. The S&P 500 is falling like a global trade war has begun  2. Oil prices are falling like we are heading into a recession  3. Gold prices are rising like inflation is on the rise  4. Bond prices are rising like inflation is declining   5. Crypto is falling like risk appetite has collapsed  6. Tech stocks are falling like DeepSeek is back  Are you ready for the most volatile market in history?

XTOD: Strategic Bitcoin Reserve makes as much sense as Strategic Baseball Card Reserve.

XTOD: The US imported about 80% of the potash used to fertilise American farms from Canada, according to government data

XTOD: Bitcoin 2010: f-the govt. f-Wall Street. Independent money!  Bitcoin 2025: f-yeah govt. f-yeah Wall Street. We want $100k!  What really happened in between? This isn't monetary adoption, nor is price a sign of progress toward it. This is an admission it's all about price regardless of everything else.  So sad. So much potential wasted.

XTOD: Warren Buffett: "If you're going to do dumb things because a stock goes down, you shouldn't own a stock at all."  "Some people are not emotionally or psychologically fit to own stocks — but more of them would be if [they understood that] you're really buying part of a business."

XTOD: “Not life, but a good life, is to be chiefly valued.”    — Socrates

https://x.com/KobeissiLetter/status/1896659975914553745

https://x.com/HannoLustig/status/1896592210797457432

https://x.com/JavierBlas/status/1896703434340110525

https://x.com/JeffSnider_EDU/status/1896605175990686142

https://x.com/kejca/status/1896218837777101279

https://x.com/Mythos_Man/status/1896711216497881089

Daily Economic Update: March 7, 2025

Queue Chris Tucker

Ignore the CNBC Market Sell-Off banner, sip your favorite tariffed tequila, buy a U.S. manufactured car - because it’s Friday and you ain’t got no job and you ain’t got shit to do.  

Jobs Day in ‘merica! Estimates peg +160K, unemployment at 4%, with X buzzing about weather rebounds and fed layoffs (DOGE’d or not). Challenger’s 172K layoffs—highest since ’09—scream recession, but weekly claims yawned.   Challenger job cuts this high tend to correlate with recessions, will this time be different?

What’s the French word for “Stagflation”

Our friends across the pond at the ECB cut 25bps as expected, citing slower growth estimates and uncertainty. What is the economic term when you have negative growth and rising inflation - Comment dit-on stagflation?  Anyway, -0.9% GDP growth with 2.3% inflation forecast for 2025…spells “baisses de taux” I guess.

In case you were wondering, they will remain “data dependent”. Nothing beats a “meaningfully less restrictive” policy stance while revising up your 2025 inflation forecast to 2.3% - whatever, long and variable lags, expectations, pick your catch phrase.

Don’t worry, Fed Governor Waller is in no mood to cut rates at the upcoming Fed meeting. He could still see two cuts later this year, but he’s data and the “t” word dependent.

With central bankers seemingly clueless, perhaps we need wisdom from one of the world’s greatest investors.

Ooh, a storm is threatening My very life today If I don't get some shelter Ooh yeah, I'm gonna fade away

While markets puke, the legendary Howard Marks dropped his latest memo, Gimme Credit, presumably a pun on the Rolling Stones hit Gimme Shelter. For Marks, credit’s your shelter when equities’ P/Es are drunk at current levels. 

A big takeaway from the memo is that current expected returns on credit are much better than what the expected return from equities has historically been when P/E’s are at current levels.  Marks also rebukes the concerns over spreads being historically narrow, saying: “The bottom line for me – as I tell anyone who asks – is that you can’t eat spread, or spend spread, or pay pension benefits with spread. For those things, you need returns. Spreads have to be assessed to ensure they’ll be adequate to offset credit losses, but in the end, it’s the total return that matters.”  Despite Marks speaking to the benefits of credit and private credit, he doesn’t dismiss the risk inherent in the rapidly growing private credit market.  For me, Marks is one of the best minds in thinking about risk and asset allocations.  In this memo, he references two of his recent memos, On Bubble Watch and Ruminating on Asset Allocation, which you can read my commentary about here and here respectively.

I gave up tariffs for Lent - so only econ data on the look ahead

I’ve written ‘tariff’ 100x this year—so for Lent, I’m giving it up. This Friday, we’ll just focus on Jobs data and whatever the man in the Orange Hat says (aka J-Pow, aka the Orange Powell Ranger)

We go into this Jobs Friday with S&P down at 5,720 - those darn globalists. The 2Y yield at 3.97% and the 10Y yield at 4.29%, where will things end if data is a bad miss vs. a big beat?

XTOD: Challenger Gray report: U.S.-based employers announced 172,017 job cuts in February, the highest total for the month since 2009 and the highest monthly total since July 2020 when 262,649 cuts were announced

XTOD: Tuesday: Trump slaps 25% tariffs on Mexico and Canada

Wednesday: Trump exempts the auto industry

Thursday am: Trump exempts most Mexican imports

Thursday pm: Trump exempts most Canadian imports (though he still insults Canadian PM)

Meanwhile... Trump says more tariffs coming April 2.

This kind of whiplash is damaging to the economy. How can anyone plan? Or even understand what the real goal is here?

XTOD: The stock market is down but at least everything is more expensive and services are getting shittier. On the other hand we have more measles. To be fair, they are finally delivering the reductions in FAA and National Parks staff that people have been demanding.

XTOD: Let's call it how it is in terms of a scorecard. Since inauguration, SPX is down 4% and China FXI up 24%. Worse, the most prominent stocks i.e. "market generals": $NVDA down 22% and $BABA up 71%. Perhaps someone should explain to the President why (Masa Son, Tepper, Cook? )

XTOD: What you push down doesn’t vanish. It festers and wields quiet power over your thoughts and actions.  What needs to be addressed that isn’t currently being addressed?

https://x.com/NickTimiraos/status/1897633379824136347

https://x.com/byHeatherLong/status/1897745796432642417

https://x.com/brianschatz/status/1897715279805006096

https://x.com/NewsLambert/status/1897703602291949821

https://x.com/JamesClear/status/1897754488309702704

Daily Economic Update: March 11, 2025

Can you smell what The Rock is Cooking?

The Rock is a precipitous fall in equities, and the smell? That’s the whiff of stagflation. You caught it in the latest NY Fed SCE report::

•  “Median inflation expectations increased by 0.1 percentage point (ppt) to 3.1 percent at the one-year horizon”, 

• “The share of households expecting a worse financial situation one year from now rose to 27.4 percent, its highest level since November 2023.” 

•  “The mean probability that the U.S. unemployment rate will be higher one year from now—jumped up by 5.4 ppt to 39.4 percent in February, its highest reading since September 2023.”

A real feel-good story. And that smell might make you puke.

Worst Day of The Year For Equities

Not a banner day for growth investors, especially Tesla bulls. TSLA is now down nearly 50% from recent highs.

T-Bill and Chill seems to be the winning strategy so far this year.

Not Investment Advice but - “This too shall pass”

According to legend, the wise men finally boiled down the history mortal affairs into a single phrase, 'This too will pass’.  

What’s an investor to do?  

• Keep a long-term perspective focused on your personal goals.

• Understand that downturns are normal—and history favors the patient.

• Focus on underlying value and build in a margin of safety rather than chasing price action. 

• Remember: nobody can predict the future. 

• Adopt intellectual humility—be wary of anyone claiming certainty.

This has been the stance of this blog since the beginning. Warren and Charlie said it best:

“In order to succeed, you must first survive.”

“Never interrupt compounding unnecessarily.”

Smart.

With the Fed on blackout, we’ll see what leaks out of the Administration mouthpieces and what the JOLTS data brings next.

Do Central Bankers Run the World?

Imagine the U.S. public electing a former Central Banker to be President. In Canada, they basically did—granted, Mark Carney was head of the Bank of England, not Canada.

Still…

Central bankers should be easy targets in any campaign after the last 20 years.

Do Inflation Expectations Matter?

Quick history lesson:

Back in 2021, Jeremy Rudd at the Fed wrote a paper trashing the New Keynesian idea that inflation is driven by expectations. Rudd argued that “anchored expectations” became an excuse to adopt policy mistakes.

He suggested that real-world factors—like actual inflation and economic conditions—might give a better understanding of inflation dynamics.   Something to chew on while you read every inflation survey this week.

The Only Honest Answer:

“I Don’t Know.” It’s the right answer to just about everything in the markets.

Since I don’t know, I’d be happy to hear your takes in the comments - have at it.

I’d write more about the day ahead, but my blog experienced a “massive cyber-attack”.

XTOD’s:

XTOD: In our view, the market is discounting the last leg of a rolling recession, which will give the Trump Administration and the Powell Fed many more degrees of freedom than investors expect, setting up the US economy for a deflationary boom in the second half of this year!

XTOD: The S&P 500 just erased 9 months of gains in only 12 trading days...Markets can handle bad news, but not uncertainty.

XTOD: Plan appears to be more government at the border (trade and immigration) less government inside the border (doge and taxes). Rebalance the economy from the public sector to the private sector.   There’s obviously a price to pay for that. How big? I don’t know. How much pain are they willing to tolerate? More than people thought.

XTOD: I think it’s obvious that Twitter’s problem is Elon Musk working remotely and being too focused on DEI issues.

XTOD: Your ultimate success is governed by your ability to tolerate the uncertainty on the path to get there. The one who can tolerate the most uncertainty is the one who will eventually win.

https://x.com/CathieDWood/status/1899180530404413859

https://x.com/Stocktwits/status/1899232407967920380

https://x.com/FerroTV/status/1899153699299287229

https://x.com/RobinWigg/status/1899150850573955534 https://x.com/SahilBloom/status/1899078997503365361

Daily Economic Update: March 31, 2025

 The ‘93-’01 Boom: When Surpluses and Compact Disc Were a Thing

Friday gave us more stagflation vibes, with UofM inflation expectations hitting their highest since ‘93 at 4.1% and PCE sitting at 2.8%—while growth seems fleeting (just check the Atlanta Fed GDPNow). But as a counterpoint, I’ll just throw it out there: 1993 was a solid year for rap and rock music, and, call me crazy, but the economy from ‘93 to ‘01 wasn’t half bad either.

Let’s take a quick trip back. The U.S. economy in that period? Absolutely cooking. GDP growth averaged around 4% annually, job creation was strong, and by the end of the decade, unemployment had fallen to a near 30-year low of 3.9%. Productivity surged, fueled by the tech boom—back when dot-com wasn’t just a punchline.

Inflation? Tame. The Fed, under Alan Greenspan, mostly kept CPI in check, with inflation averaging just above 2%. Meanwhile, the federal budget actually ran a surplus from 1998 to 2001—yes, a surplus, a concept so foreign today it might as well be a VHS tape. This was helped by a mix of spending restraint and tax hikes under Clinton, plus a flood of capital gains revenue from the stock market euphoria.

Speaking of markets, the S&P 500 went on an absolute tear, gaining over 400% from 1993 to its peak in early 2000. Then, of course, came the dot-com bust, reminding us all that stocks don’t just go up forever.

So yeah, the ‘90s economy had its share of good times—before the hangover of 2001 hit with the recession, tech crash, and all.

The lesson might be something we talked about early in the year, I call it the “trees don’t grow to the sky” narrative, one that deals with cycles and mean reversion.  In the case of the ‘90s economy,  the stability and complacency that resulted from numerous favorable conditions coming together over that period may have sowed the seeds for future problems as investors assumed these conditions would go on indefinitely and given little attention to the underlying imbalances that were building up.

Speaking of Nostalgia: The Fed Dusts Off 'Transitory'

The Fed has been so nostalgic for the word “transitory” that they’ve revived it. We’ve reached peak nostalgia—now ‘transitory’ and ‘tariffs’ are like a toxic couple that just won’t break up.  For example -  Don’t worry the impact of tariffs will be transitory.  

Second-Order Thinking: The Market’s Favorite Trick Play

If I told you that inflation data all pointed to inflation being stronger than expected and asked you to guess the direction of bond yields, my assumption is you would say yields would move higher.  But despite higher inflation expectations and sticky inflation, yields fell. Of course you’ll say something like, but growth concerns and stock market volatility led to a “flight to quality”.

The lesson? Second order effects - we talked about this as the separator of good and bad economist.  We don’t always understand “what’s priced in”, “positioning”, and overall second order effects and beyond. The most poignant example of second order effects that I can recall was during the start of Covid in 2020, when yields on the presumptive safe-haven assets, U.S. treasuries unexpectedly rose during March 2020.  If you focused solely on first-order effects of a global pandemic, the sale of risky assets like equities and the purchase of U.S. Treasuries made perfect sense and indeed it's what happened from February until March 9, 2020.  From there however second-order effects began to dominate. It turned out investors needed to sell Treasuries to raise cash for all kinds of reasons - meeting investor redemptions, meeting margin calls, to factors impacting foreign holders of treasuries. 

I call to mind the Treasury market dynamics of 2020 because of the recent media attention around a paper arguing that the Fed should set up a program to close out hedge funds treasury basis trades in times of market stress.   

More Lessons: Twain, Housel, and the Art of Being Wrong

Perhaps the real lesson is immortalized in the words of Mark Twain: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.“  

We’re tempted to draw quick and certain conclusions from data or market narratives - but as Morgan Housel reminds us, “if you’ve relied on data and logic alone to make sense of the economy, you’d have been confused for a hundred straight years.”

You don’t have to wait 100 years to be confused, I’m sure this week will suffice.

The Week Ahead: Can Liberation Day Be A Holiday Yet?

We enter the week with the S&P 500 index at 5,580.  The 2Y treasury yield at 3.91% and the 10Y at 4.25%.  

Tariffs and Jobs will be the focus.

Today: take a breather and finish month end/ quarter end

Tue: ISM mfg, JOLTs and April Fools Day

Wed: Liberation Day

Thur: Jobless Claims, ISM services

Fri: Jobs Day in ‘merica, Powell speech

XTODs

XTOD: New: Trump privately pushing aides to go bigger on tariffs as April 2 “Liberation Day” nears  President revived idea of flat universal tariff single rate on most imports  Feels 1st term advisers went too small & soft with exemptions  Bannon pitches “Liberation Day” as federal holiday next year

XTOD: Shocking report by @andrewtlevin at @mercatus  showing that growth in Fed salaries massively outpaced other sectors. In my own experience at the New York Fed I affirm that there the organization is massively overstaffed and overpaid.

XTOD: Probably no better formula than “high passion and low status” for an area to go work in and create things  https://pbs.twimg.com/media/GnOtm__WQAAzrZa?format=jpg&name=900x900

XTOD: Reminder: If you don’t prioritize your life, someone else will.

https://x.com/JStein_WaPo/status/1905947983062904832

https://x.com/FedGuy12/status/1905637468746977400

https://x.com/patrick_oshag/status/1906057956988219392

https://x.com/GregoryMcKeown/status/1906058792795865343