Fed Chair Powell was hawkish today. He's clearly worried about inflation from tariffs, supply chain issues, etc. He does NOT seem eager to cut interest rates (as Trump wants) to lessen the tariff impact. I concur with Diane Swonk

“Powell’s termination cannot come fast enough” I actually think he means the end of Powell’s tenure as Fed Chair in May 2026. I don’t think he means firing. But we’ll see… Treasury Secretary Bessent said White House would likely nominate a new chair by the fall.

The manufacturing layoffs are starting to happen from the #tariffs. Volvo laying off several hundred workers in Pennsylvania and Mack Trucks laying off at its Maryland plant.

Full press release here:

Full story w/great charts here:

Trump's federal government job cuts are starting to show up in the data. -8,500 federal gov't jobs lost in April -3,800 in March -8,600 in February More expected in the months ahead. (Note: This data excludes postal service workers)

Fed Chair Powell sums it up: “Risks have risen, but they haven’t materialized yet," he says. "The right thing to do is await further clarity.” Bottom line: The Fed is on hold. No more rate cuts for now.

Just in: The Federal Reserve keeps the benchmark interest rate unchanged at 4.25 to 4.5%. **But the Fed adds a warning about stagflation:** "the risks of higher unemployment and higher inflation have risen."

Jobless claims came back down last week (week ending May 3) to 228,000. There had been a jump the week before, but it was not sustained. Keep a close eye on this. We may start to see layoffs pickup if nothing changes in tariffs.

Full report from The Washington Post here: "Trump announces trade pact with United Kingdom"

One more thing to worry about: The US gov’t could default in August if Congress does not raise the debt ceiling before then… Treasury Secretary asking Congress to act by mid-July.

“The Trump Administration has blinked, big time” on tariffs, writes Greg Valliere. It sure looks like President Trump does not want a recession and was starting to fear empty shelves from his trade war.

This is an important point... Any Chinese good that was subject to a 25% tariff in Trump's first term will now have a **55%** tariff after the reductions. 10% from Liberation Day +20% due to fentanyl +25% from Trump's first term Total = 55%

Her full column is here and is one of the most read pieces on WaPo today: RIP American innovation Why destroy the funding that made the United States a leader in technology and invention? by Bina Venkataraman

Full piece here: "What Pennsylvania factory workers say about Trump’s tariffs now"

Full story here: “White House eased China tariffs after warnings of harm to ‘Trump’s people’”

Why did Trump blink on China tariffs? “The key argument was that this was beginning to hurt Trump’s supporters — Trump’s people,” one person briefed on the talks said. “It gave Susie [Wiles] a key window.” Great reporting from @JStein_WaPo Natalie Allison David J. Lynch

What a chart. This latest GOP tax cut bill would add a massive amount to our national debt. Nothing in recent history even comes close to this much $$$

Fed will cut ~10% of staff. (This will happen mainly by attrition and early retirement incentives). Cuts are expected to be made across the entire Federal Reserve System, including the 12 regional banks. Roughly 2,400 people will be affected.

Link here to the podcast episode: AI and Jobs: What do we really know?