Waiting on the world to change

For President Trump the conflict between Israel and Iran has concluded. Perhaps only to him. It would appear as they have agreed to a ceasefire, but it’s likely to be temporary until they regroup and strike again. Back on the domestic front, the OBBB drama continues on the senate, where there is no clear timeline for voting or passing Trump fiscal bill. If it does indeed pass as written and amended by the house, the bond market will provide its opinion free of charge. And it may not be good. And this will come on the context of an economic slowdown. It’s debatable wether tariffs have had an impact, but leading indicators, seen below, are modestly showing weakness. Jerome Powell, chairman of the the Fed, will deliver the Federal Reserve’s Semiannual Monetary Policy Report to the House Financial Services Committee at 10 a.m. in Washington under continues pressure from the president to lower rates. He will probably present a stagflationary scenario to justify his decision to maintain rates at 4.25-4.5%. We’re five days away from mid year, and equity markets are flat and the 10 year treasury yield is tad lower than it was at the beggining of the year. It seems the market is waiting for a signal to make decision wether to go higher or lower.

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