Thank God it's Friday

Today is Friday for the US stock market due to the exchanges being closed for Good Friday tomorrow. Honestly, a long weekend is much needed after the challenges of the past few weeks. For investors and those of us in the advisory business, it’s been reminiscent of the relentless gloom of 2008-09.

It’s not that we lack faith in eventual recovery, but the constant noise—often driven by political leanings—has been unsettling. Markets have been swinging wildly, with movements like down 5%, up 8%, down 9%, up 3%, all within a single trading session. Talk about volatility—it's exhausting.*

Yesterday, the market reacted to comments from Fed Chair Jerome Powell, who suggested that Trump’s tariffs might be inflationary. While this made headlines, it might not be entirely accurate. Tariffs can raise the price of goods, taking a larger share of consumers’ paychecks, but higher prices alone aren’t inherently inflationary. Inflation stems from excess money in the system chasing those goods. Most consumers understand this, having experienced it during the post-COVID inflation surge and earlier when rising gas prices forced tough choices like skipping healthcare to fill their tanks

So why is Powell, a highly intelligent figure, linking tariffs to inflation? Is it politics? Is he anticipating other actions from Trump? Or is he simply keeping his options open? We don’t know, and that uncertainty fuels market reactions. For now, this remains a short-term issue.

There is no doubt Trump believes tariffs are an effective tool to change poor trade policy. He is obviously willing to use them as a blunt weapon. He has used this weapon before (see my previous post on Tariffs) He has also stated that there is a 90-day delay in the majority of his recently announced tariffs. During that period, he, and his team, expect to negotiate favorable trade terms with a number of countries. He expects to change the level of tariff based on how those negotiations go. So, we will know, hopefully, what the trade landscape looks like in a very short time frame.

Meanwhile, the Federal Reserve faces its own long-term challenges. With a dual mandate to promote price stability and maximum sustainable employment, the Fed relies on tools like monetary policy and setting the federal funds rate. These measures take time to impact the economy, often leading to criticism that the Fed is “late to the party.” or always behind the curve.

Turns out Trump is tired of Jerome Powell and the Fed being late. It's been reported he has had discussions to remove Powell for several months. Regardless, Powell’s term ends next year, and a new Fed Chair will take over. Until then, the Fed will meet seven more times to decide on rate cuts. Economist Brian Wesbury of First Trust Advisors LLC argues that the Fed should act now to avoid being late again.

Regardless of what unfolds, the media and Wall Street pundits will undoubtedly share their opinions, often stoking fear and adding to the volatility. So, Happy Friday—let’s enjoy the long weekend before diving back into the chaos next week.

https://www.quantumprivatewealth.com/post/from-brian-wesbury-time-to-cut-rates

*The Dow surged nearly 3,000 points or 7.87%, on Wednesday. The S&P 500 shot up 9.5%. The tech-heavy Nasdaq soared 12.2%. This marked the best day for the S&P 500 since October 2008. The Nasdaq posted its best day since January 2001 and its second-best day on record. While the Dow posted its best day in five years.

Quantum Private Wealth LLC. is an investment adviser located in Tampa, Florida, Lake Forest, Illinois and Frankfort, Michigan. Quantum Private Wealth LLC. is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Quantum Private Wealth LLC. only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Quantum Private Wealth's current written disclosure brochure filed with the SEC which discusses among other things, our business practices, services, and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.

Please note, the information provided in this document is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. Please refer to the disclosure and offering documents for further information concerning specific products or services.