There is a lot of key data on deck this week. Given the historic collapse in the Philly Fed Index in March, all eyes will be on leading indicators. We’ll discover if this was a fluke or part of a broader phenomenon. Monday brings the preliminary Market PMIs, and we will also get the Richmond Fed and Kansas City Fed indices on Tuesday and Thursday respectively. One other series that could prove prescient is the University of Michigan Sentiment Survey on Friday. There are a few other data points of interest, but the PMIs will likely garner most of the attention.

The Macro Week In Review

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The Macro Week Ahead

🏀 Round 1: Doves (5) vs. Hawks (12)

In 33 of the last 39 NCAA Tournaments, a #12 seed has upset a #5 seed (our condolences to Clemson fans). Despite March’s proclivity for upsets, last week’s market-moving event, the FOMC meeting, went as expected. The Federal Reserve held interest rates steady at 4.25-4.50%. Chairman Powell’s press conference had a dovish tone, emphasizing “uncertainty” about the economic impact of tariffs and rising recession risks.

One statement that stood out was Powell’s use of “transitory” when discussing the potential inflationary effects of tariffs. This echoed the Fed’s 2021 misjudgment when it underestimated inflation before aggressively hiking rates. Powell also downplayed the University of Michigan’s inflation expectations survey, which showed:

 ↗️ 1-year expectations: 4.9% (up from 4.3%)
     ↗️ 5-10 year expectations: 3.9% (up from 3.5%)

Despite concerns about inflation, markets remain confident in a rate cut this year, pricing in an 84% chance of at least one cut by the June 18th meeting. White House pressure to ease rates is another factor, though the Fed remains independent in its decision-making.

🦅 The Hawks’ Case: Inflation Risks Persist

While Powell leaned dovish, data and some FOMC members remain hawkish:

 📈 Philly Fed Prices Paid: 48.3 in March (+8 pts M/M)
   🏭 Industrial Production: +0.7% M/M (above expectations)
   ⚙️ Capacity Utilization: 78.2% (vs. 77.8% prior)

The Fed’s March Summary of Economic Projections reflected this hawkish tilt:

Core PCE: Revised up 30 bps to 2.8%
Headline PCE: Revised up 20 bps to 2.7%
GDP Projections: Lowered, but 2025 rate expectations edged higher

Given labor market trends and rising inflation indicators, we believe the hawks will prevail this year.

📅 The Week Ahead
Slowing Regional Data:
Empire Manufacturing (-15) and Philly Fed (8) showed sharp M/M declines
Expected New Orders in 6 months (Philly Fed): Plummeted to 2.3 from 57

Key Economic Events:
📌 Monday: S&P Global Manufacturing & Services PMIs (expected > 50, but downside risks exist)
📌 Tuesday: Richmond Fed Survey (has yet to show declines seen in other regions)
📌 Friday: Personal Income, Personal Spending, and PCE Price Index (a key inflation gauge)

🔮 Market Implications
With dovish Fed commentary but hawkish inflation data, markets face a volatile outlook. Will inflation concerns keep rates elevated longer, or will slowing economic data force the Fed into rate cuts?

The battle between doves and hawks continues.

Macro Job Board

Global Macro Cross Asset Investment Strategist @ StoneX Group (Miami)

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.

Global Macro Portfolio Manager @ GIC (New York)

Looking for a highly qualified candidate to join our Global Macro (GM) team as Assistant Vice President / Vice President, Portfolio Manager, within the Multi-Asset Absolute Return Portfolio (MAARS). Responsible for portfolio management and return generation, with a focus on macro equity across country, sector, style, and thematic investments.

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

🚢 Why Ships Are The New Chips

🤖 China’s AI Boom Is Reaching Astonishing Proportions

📉 Citing Tariffs & Uncertainty, Fed Sees Higher Inflation And Lower Growth

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