Israel and Iran are not the only ones at War.
For some time now, President Trump and Fed Chairman Powell have been in a bit of tug of war. For the most part, Chairman Powell is letting his action (or really in-action) do all of his talking. But President Trump has made it very clear - he believes Chairman Powell and the Federal Reserve should be lowering interest rates by as much as 1%.
Well, this week, the Fed officials will conclude their latest two day meeting. At the moment, it appears that the Federal Reserve is very likely going to leave interest rates alone for now.
But why?
Well, there's certainly still some ambiguity with respect to tariffs and trade wars. How will that get resolved? How will that impact inflation? Also, with the war now between Israel and Iran, the price of oil has spiked even more. Remember, oil is a key component to the inflation calculations.
So, it appears Chairman Powell is likely going to announce no changes to their interest rate targets.
That said, given the massive stock market rally we've seen off the April 7th low, we want to step back and take a look at the overall market. What have the broad indices done so far this year?
Not much.
Finally, given the new war in the Middle East, last week we saw a very large spike in the price of oil. We take a quick look at another time when a war in the Middle East causes a spike in oil and what happened after that spike. Remember, a key tenant of Evidence-Based Investing is letting the data drive our decision-making - not fear.
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