#us-recession

#us-recession

The challenges we all face are significant. The list is long but at the top are the terrible ongoing war and violence in Ukraine, the current war in Iran and the broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, importantly with China.

The geopolitical backdrop in the Middle East remained tense after renewed threats to Iranian infrastructure from President Donald Trump, although reports of a potential deal could limit the demand for the dollar.

The AIM Index is a survey of more than 140 Massachusetts employers that has run since 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The state's March rating was 47, down from 52 in February.

The Bank of Japan's loose monetary policy has turned the yen into the world's cheapest and most reliable funding currency, creating a publicly subsidised funding pipeline for bankers.

'Walmart Worries' just keep multiplying. It's currently close to the highest level ever recorded which was during the Great Financial Crisis of 2008-09.

In my view, interest rates are more likely than not going to head lower over the course of 2026 and into 2027. I'm not saying we're due for a pandemic-like selloff, but I do think that weakness in the labor market is likely more protracted than the government data suggest. As such, I do think the makeup of the Federal Reserve, and which way many of its presidents and voting members lean (toward providing support for the labor market over battling inflation) could lead to much faster rate cuts than many think.

The S&P 500 closed up approximately 2.4% near 6,496, while the Nasdaq Composite gained roughly 3.3% to around 21,475, indicating a strong market response to geopolitical news.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The implications of developments in the Middle East for the US economy are uncertain, the central bank said in a statement announcing its policy decision and referring to its Federal Open Market Committee.

Goldman Sachs now expects Brent crude to average $105 per barrel in March and $115 in April before retreating to $80 by year-end, assuming roughly six weeks of Hormuz supply disruptions.

Rising inflation concerns, hawkish monetary policy signals, and escalating geopolitical tensions weighed on risk assets. Energy markets are adding to the pressure. Oil prices surged following renewed attacks on energy infrastructure in the Middle East, intensifying concerns about inflationary pressure.

September, or more likely October, is now the realistic opportunity for a rate cut, and even that is far from guaranteed. The data coming through is not consistent with easing in July. In fact, it points in the opposite direction. Inflation is not falling fast enough. The latest wholesale inflation data shows prices rising at 3.4% year-on-year, the strongest pace in a year, and core measures are still running close to 4%.

U.S. economic growth cooled significantly in the fourth quarter of 2025, which the Trump administration attributed to last fall's record-long federal government shutdown and softer consumer spending. Gross domestic product rose at a 1.4 percent seasonally adjusted, inflation-adjusted annual rate in the final three months of last year, the Commerce Department said Friday, well below the 2.5 percent pace expected by economists.

Since taking office, Trump has imposed a range of tariffs on countries, including key trading partners, leading to predictions of inflation skyrocketing, manufacturing screeching to a halt and unemployment soaring. None of those scenarios came true. Inflation, while above the Federal Reserve's target, was a modest 2.7 percent in December. The unemployment rate was relatively low, at 4.4 percent, last month.

Trump is trying to reverse his sagging approval ratings by brute force, leaning on populist instincts to deliver visible cost relief before November. The result: institutional stability and capitalist norms - like so much else in the Trump era - are increasingly subordinate to raw presidential power. Zoom in: Trump has denied knowledge of the Justice Department's criminal inquiry into Fed chair Jerome Powell, which is nominally focused on cost overruns from the central bank's renovation of its D.C. headquarters.