Find active links at discussion.fool.com - Control panel uncertainty slightly moderates

The extreme uncertainly of the past 2 months has moderated slightly over the past week.

On March 15, 2025, Congress managed to pass a full-year “continuing resolution” (CR) that continues funding the federal government through the rest of the fiscal year. This eliminates the threat that the government will shut down immediately. Treasury will be able to continue to pay the government’s bills.

As expected, the FOMC kept the fed funds rate stable.

The tariff situation didn’t change last week so the markets could take a breath.

President Donald Trump imposed sweeping 25% tariffs on all steel and aluminum imported into the United States the week before last, a policy aimed at leveling the playing field for US manufacturing but a move that threatens to drive up prices on a broad range of consumer and industrial goods for Americans. That’s in addition to the 25% tariffs on Canada, Mexico and the EU and 20% on China. China and Canada have both retaliated against the IEEPA tariffs, while Canada and the European Union have both retaliated against the steel and aluminum tariffs. Here is a list:
Tax Foundation

Tracking the Economic Impact of the Trump Tariffs

President Trump's 25 percent tariffs on Canada and Mexico is estimated to reduce long-run GDP by 0.2 percent, reduce hours worked by 223,000 full-time equivalent jobs, and reduce after-tax incomes by an average of 0.6 percent—before accounting for...

The stock market slightly recovered its losses during last week’s reprieve from new tariffs. Investors shifted to bonds and gold. The Fear & Greed Index is in Extreme Fear. The trade is strongly risk-off.

The Treasury yield curve continued to fall.

Unlike Treasuries, the Chicago Fed’s National Financial Conditions Index (NFCI), which provides a comprehensive weekly update on U.S. financial conditions in money markets, debt and equity markets, and the traditional and “shadow” banking systems, tightened slightly. Financial Stress increased slightly although both these indicators are still loose.

Since tariffs are expected to both increase inflation and slow economic growth the markets are looking forward to stagflation.

The Atlanta Fed’s GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 was -1.8 percent on March 18. The Cleveland Fed’s Inflation Nowcasting predicts Quarterly annualized percent change of the CPI of 3.85% in 2025:Q1.

The administration and DOGE have laid off many government employees but they are to be cut off in September so the numbers haven’t hit the unemployment figures yet. Congress is planning to cut programs that will directly impact poor and working class families, including Medicaid and SNAP, which will directly impact the companies that provide goods and services. Discount chains and junk food stock prices have already been impacted.

wsj.com - Are pop tarts on the chopping block with gop cuts

The METAR for next week is cloudy. It’s impossible to predict the next monkey wrench that will be thrown into the machinery of trade and government in the next week.

Wendy

St. Louis Fed Financial Stress Index

Provides a