Last week saw a relative calming of the market. Mortgage rates and treasury yields improved during the week. This was driven in part by lighter trading volume, which occurs when the markets are closed. The Bond Market closed early on Thursday remaining closed on Friday in observance of Good Friday. Traders will normally take off in advance of the holiday market closures and lighter trading volume ensues. The markets are back to normal trading volumes. Volatility is back! The Bond Market and Stock Market both have a lot to digest. Investors are still weighing concerns about the announced tariffs. The lack of a tariff deal, any tariff deal, is concerning the market. It does not need to be a deal with China, which is the most important deal to make, investors just want to se a deal made. It appears the tariff issue is here for a while. Are the tariffs inflationary, recessionary, or will they drive stagflation? The ongoing rhetoric between President Trump and Fed Chair Powell is added to the mix of traders concerns. President Trump urged Fed Chair Powell to lower rates. President Trump is pushing Fed Chair Powell to follow the European Central Bank, which lowered rates last week, and lower rates immediately. Fed Chair Powell last week sounded the alarm on growth and inflation risks as a result of the tariffs. Therefore, it does not look like the Fed is budging. The increasing tension is causing shock waves across multiple markets. The Stock Market sold off. The dollar reached levels not seen in three years. Gold spiked to a record high above $3,400.00 per ounce. U.S. Treasury yields are moving back up. We can expect this to be the driving force behind the market moves across all markets.
