This week is packed with market-moving data, but our radar is locked on the first regional PMIs for May, specifically Thursday’s Empire State (NY Fed) and Philly Fed reports. The Prices Paid components of both are some of the best early reads on inflation momentum (check out the chart above). That’s especially timely with CPI and PPI also on deck. We’re about to get a snapshot of both current inflation and where it might be heading.

Rounding things out, we’ve got the NFIB survey Tuesday, the NAHB housing index Thursday, and the preliminary University of Michigan Sentiment report on Friday. This last series is our look into how inflation expectations are evolving on Main Street. Stay tuned, it’s a big week for forward-looking signals.

The Macro Week In Review

Get Over $6K of Notion Free with Unlimited AI

Running a startup is complex. That's why thousands of startups trust Notion as their connected workspace for managing projects, tracking fundraising, and team collaboration

Apply now to get up to 6 months of Notion with unlimited AI free ($6,000+ value) to build and scale your company with one tool. 

Get Free Notion + AI

The Macro Week Ahead

🤐 Chairman Freud & The Path of U.S. Monetary Policy

The concept of a Freudian slip traces its roots to a doctor interviewing a patient who accidentally revealed past trauma through a slip of the tongue. Freud contended that these speech mix-ups offer a glimpse of one’s true feelings. 

During the Q&A of last week’s FOMC meeting, Fed Chair Powell stated that he was very comfortable with the current position of monetary policy and depending on the severity and influence of tariff implementation on the economy, “that could include rate hikes — sorry, rate cuts.”

To be fair, the Powell was clear that the Fed is seeing rising risk on both sides of its dual mandate. Choosing which fire to put out first, according to Powell, depends on the severity and pace with which each factor deviates from “normal.” In 2024, the Fed adopted a more forward-looking bias by cutting rates 100 bps from the peak despite inflation never returning to its mandated level.

Today’s strategy at the central bank is different, with the Fed focusing on the current strength of the U.S. economy and seemingly dismissing the stagflationary environment implied by leading economic indicators. The policy rate was left unchanged, but if Dr. Freud’s work has any validity, we may see rate increases on the horizon as tariffs push up inflation. The next Fed meeting is June 18th with the odds of a rate cut falling from 100% in early April to 17% as of last Friday.

🔢 "I'm Bad With Numbers ... Maybe 80?"

The S&P 500 continues to trend based on the latest trade deal news. Upon President Trump’s suggestion of 80% tariffs on China, we were reminded of a SNL skit where a confused Christopher Walken guesstimates the number of residents of his apartment. “80 seems high. How about 4.”

Treasury Secretary Bessent is off to Switzerland for Round 1 of formal negotiations with Chinese Vice Premier He Lifeng. We do not expect concessions from either party, as both nations need to walk away from the discussion with political wins to announce. Historically, trade deals take years to iron out.

Meanwhile, the Port of Los Angeles indicated cargo imports fell 35% from the prior week following a surge in shipments ahead of the April 9th tariffs. The clock is ticking for a deal with China, as the U.S. is not far from shortages across the U.S.

📅 The (Busy) Week Ahead

We’ll kick off a super busy week at 6:00 am with the NFIB’s Small Business Optimism Index where we’ll be looking to see if the stagflationary readings we’ve seen is evident in smaller firms. We suspect it is.

Then, all eyes will be on Tuesday’s April CPI report at 8:30 am as we get our first real look at how the impact of tariffs might be flowing through to consumer prices. Headline CPI will benefit from lower gasoline prices and likely further disinflation in shelter. Meanwhile, Core CPI is anticipated at 2.8% year-over-year, which is in line with March. Keep in mind, there was a large amount of pre-buying ahead of tariffs which pushed down 1Q GDP, so April’s inflation report will represent some pre-tariffed goods inventory, but the regional manufacturing prices paid suggest CPI begins ramping up over the next few months.

Thursday we’ll get our first look at the month of May with Empire Manufacturing out at 8:30 am. Like most regionals, the Empire Index moved significantly higher following the election before retreating over the last few months. Pessimism in the survey is rampant, with Expected New Orders falling to lows last seen in the Global Financial Crisis. The Philly Fed for May is also out on Thursday and trends across all the components echo what we see in Empire. Expectations for the headline index are -11.0 compared to -26.4 last month, which suggested an abrupt slowing of business activity across the City of Brotherly Love.

The focus on tariff activity, economically speaking, refers to the importance of the U.S. consumer on the global economic stage. One proxy of its health is Retail Sales, which we’ll see on Thursday for the month of April. Nominal retail sales grew 4.9% year-over-year in March and 4.1% year-over-year when stripping out motor vehicles and parts. The Johnson Redbook Retail Sales Index grew 6.7% year-over-year for the week of 5/2/25. This suggests the consumer economy remains in growth mode despite the threat from tariffs. Redbook hints that the recent lift in weekly comparisons could be the result of pre-buying activity. While consumption seems buoyant for the time being, consumer attitudes do not suggest it will last long. On Friday, we’ll get a look at the preliminary May data from the University of Michigan’s consumer survey. Consumer Expectations of 47.3 for April represented a historical low going back 20 years with the Expected Inflation component going parabolic to 6.5% vs. just 2.5% in November.

Macro Job Board

Global Macro Cross Asset Investment Strategist @ StoneX Group (New York)

Seeking a highly motivated Cross-Asset Macro Strategist to join our fast-paced and dynamic team. This is a sell-side research role designed to support the Chief Market Strategist (CMS) in delivering cutting-edge research and actionable investment strategy across multiple asset classes.

Macro Credit Research Analyst @ KBRA (New York)

Expected to monitor, gather, and analyze macroeconomic and financial markets data. Will assist senior analysts in idea generation and the production of KBRA Strategist research reports, presentation slides, and decks.

Global Macro Research Analyst @ Goldman Sachs (Washington, DC)

This candidate will closely monitor political and policy developments 
and assist economists to publish timely and innovative research on macroeconomic, political, and policy developments and their economic impact. They will also work on economic research projects and publications.

What We Read This Weekend

🚢 Don’t Blame Imports For The Fall In America’s GDP

⚡ America May Be Just Weeks Away From A Mighty Economic Shock

💵 How Europe Should Respond To The Erosion Of The Dollar’s Status