There wasn’t much to report in the way of economic releases this week, but the Fed’s Beige Book and a report from the International Monetary Fund (IMF) gave markets something to think about in between soundbites. 

The Fed’s third national survey of the year revealed what many expected: a rosy view of the current economy with storm clouds on the horizon. “Pervasive” uncertainty regarding international trade policy was the underlying theme for most respondents. Auto dealers experienced a surge in month-over-month sales as consumers attempted to get ahead of higher costs. For the same period, the IMF issued its first economic forecast since Trump’s tariffs announcements, projecting U.S. GDP growth slowing to 1.8%, down a full percentage point from last year. The report also increased its inflation expectations to 3% for the year, up from 2% as recently as January, and increased its expected probability of a recession to 37%.

The latest Bloomberg survey of economists didn’t do much to brighten the mood: increasing its projections for inflation and unemployment and downgrading its growth forecast for 2025 and 2026. The moral of the story this week is a worsening outlook for the economy as time goes on. Meanwhile, I think we can expect more “wait and see” language from the FOMC once they come out of their blackout period for the May 6-7 meeting.

KEY INDICATORS THIS WEEK

Home Sales – Existing home sales fell 6.5% in March while new home sales rose 7.4%. The average price for a new home was slightly lower than an existing home, which is unusual because there is typically a premium on new construction. Mortgage applications fell 12.7% last week as rates have continued to increase with the 10-year note.

Gold – The price of gold reached a new all-time high of over $3,400/ounce this week. As traders have worried about the safety of U.S. assets, gold has reached all new levels as the ultimate haven trade.

Next week – We get all the jobs reports, as well as the initial estimate for first quarter GDP.