By Bill Hornbarger, Chief Investment Officer
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Three Things to Watch
- With one eye on developments in the Middle East, investors will get a healthy dose of what the U.S. Federal Reserve (Fed) is thinking and worried about. On Tuesday and Wednesday, Fed Chairman Powell will give his semiannual monetary policy report to the U.S. House and Senate, respectively. Last week the Fed held rates steady with Chairman Powell signaling a “wait and see” approach to monetary policy, with higher inflation and slower growth in the updated financial projections.
- On Friday, the Fed’s favored inflation measure will be released. Core personal consumption expenditures (PCE) are expected to increase to 2.6%, with the broader overall number also projected to increase to 2.3%. Inflation readings are expected to move higher in the next several months on the impact of tariffs.
- In terms of market reactions to the U.S. bombing of Iran nuclear sites, we would expect higher oil prices and a bid for Treasuries and the U.S. dollar. U.S. stocks will likely open lower but without a major escalation, that would be normal in this year’s heightened volatility.
Three Things to Know
- The average total cost to own and operate an automobile in the United States has moved up to a record $12,296 per year, a 32% increase from the average cost just five years ago. (Source: Charlie Bilello)
- Wages and salaries for government workers are 23.6% higher than their private sector counterparts, but the real difference in cost of employment is benefits, which are 82.2% higher for government workers. (Source: E.J. Antoni)
- Iran’s parliament officially approved closing the Strait of Hormuz for the first time since 1972. Closing the Strait mainly affects Asian countries. Around 5 million barrels a day are sent to China via the straight versus only 0.7 million to the United States. (Source: Daniel Lacalle)
The above information reflects the current opinion of the author. It is based upon sources and data believed to be accurate and reliable. Opinions and forward-looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security mentioned.