Fed Between a Rock and a Hard Place (E214)

DoubleLine Portfolio Managers Jeff Mayberry and Eric Dhall discuss the week ended May 9, including a mixed bag for stocks (0:55), rates up across the board in fixed income (2:59) and commodities (4:12) largely up with the notable exception of agricultural products. Bitcoin (5:17) crossed back above $100,000. On the macro front, ISM services for April came in at 51.6, much better than the consensus estimate of 50.2. No surprise, the U.S. trade deficit for March worsened to -$140.5 billion as importers moved to front-run the imposition of tariffs by President Trump.    For the Topic of the Week (8:23), Jeff and Eric covered Federal Reserve Chairman Jerome Powell’s news conference following the Federal Open Market Committee’s well anticipated decision to stand pat on monetary policy. The upshot from FOMC guidance and Powell’s press comments was the Fed, while seeing elevated risks to its mandates for price stability and full employment, does not know how tariffs and trade negotiations will play out in the economy. Jeff Mayberry suspects that if push comes to shove, the Fed likely will prioritize inflation fighting over full employment. Topping Jeff and Eric’s calendar for the week of May 12-16 (13:12) will be April consumer price index on Tuesday.