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Why Jerome Powell Decided to Stay at the Fed

  • Fed Chair Jerome Powell will remain on the Fed’s board after his term ends May 15, citing President Trump’s legal challenges.
  • The decision followed a Justice Department criminal probe into Powell’s oversight of renovations.
  • Trump allies criticized Powell’s decision, while Powell signaled he aims to ensure the Fed’s independence and not second-guess his successor.

 
After Months of Debating Rate Cuts, Fed Shifts Toward Mapping Out Hikes

  • The Federal Reserve’s internal debate has shifted from when to cut interest rates to considering conditions that would warrant a rate increase.
  • Three Fed bank presidents dissented on language implying future rate reductions.
  • Minneapolis Fed President Neel Kashkari outlined scenarios where an extended Strait of Hormuz closure could warrant a series of rate increases.
Here’s What’s Shoring Up the Global Economy During the Energy Shock

  • The closure of the Strait of Hormuz has removed 13 million barrels of oil daily from global supplies, yet major economies show resilience.
  • This resilience stems from ample energy reserves, policies aiding consumers, and the offsetting effects of the artificial-intelligence boom.
  • The International Monetary Fund expects only modestly slower growth this year, but warns of a potential recession if the strait remains closed.
Asia Manufacturing Sector Feeling Strain From Middle East Conflict

  • The Middle East war caused supply-chain disruptions, intensifying cost pressures and prompting stockpiling in Asia’s factory activity.
  • Manufacturing expenses rose significantly in Taiwan, South Korea, Japan, Indonesia, and Vietnam in April due to higher input costs.
 

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