FED: Bostic Supports No Rate Adjustment Amidst Uncertainty

• We’ve seen four different Fedspeakers today, three of whom have been unscheduled, all pushing back on expectations of a near-term Fed cut following similar from Powell after payrolls last week.
• Daly (non-voter) wrote in a LinkedIn post that she sees time and space for the Fed to deliberate over its next moves, Kashkari (’26 voter) noted a higher hurdle to adjusting rates in either direction due to tariffs and with a hawkish skew to comments, Musalem (’25 voter) noted higher inflation risks and that a recession isn’t in his baseline in a Reuters interview, and Barkin (non-voter) told Axios that tariff price hikes might take until June to show owing to inventory levels.  
• Fed Funds implied rates remain at the hawkish end of today’s range but still show some intermeeting cut odds (2.5bps in the FFJ5 contract) and 14.5bp of cuts for May.
• Cumulative cuts from 4.33% effective: 14.5bp May, 37bp Jun, 60bp Jul, 79bp Sep, 90bp Oct and 104bp Dec.
• Further out the curve, the SOFR implied terminal yield of 3.155% at typing (SFRU6, +5bp on the day) is currently at what would be its highest close since Apr 2 before “Liberation Day” tariffs were announced but are still 24bps below those levels.
• Barkin's appearance at the Economic Club of Washington is to begin shortly (having been delayed from 1100ET) and the FOMC minutes for the Mar 18-19 meeting are still to come at 1400ET. 

Laura Weiss at Punchbowl News reporting on X that House Speaker Mike Johnson (R-LA) is using a rule for the budget resolution - on course for a vote today - to turn off the mechanism via which lawmakers can force legislation to the floor, "for any resolution dealing with the April 2 trade emergency." Jake Sherman at Punchbowl notes: "This makes it impossible for anyone to file disapproval resolutions on tariffs through Sept 30."

• The move effectively closes the door for a bipartisan group of lawmakers to take action to targeting the emergency resolution President Trump used to justify his unilateral tariffs. The Grassley-Cantwell bill in the Senate has attracted seven Republican co-signers and a sizeable group of Republicans are reportedly considering signing onto a corresponding House bill introduced by Republican Rep Don Bacon (R-NE).
• Weiss notes that, "a group of House Dems led by Meeks, Neal, Larsen introduced a privileged resolution yesterday to terminate this emergency and block Trump’s big wave of tariffs." That is the third such attempt by lawmakers to rein in Trump tariff authority.

Figure 1: Rules for Budget Reconciliation Regarding Tariffs (Punchbowl News)

The latest estimate of Q1 GDP growth per the Atlanta Fed's GDPNow was steady at -2.4% Q/Q annualized today following wholesale trade data (though up vs -2.8% on April 3, after ISM Services and trade but before nonfarm payrolls). 

• The "gold adjusted" estimate ticked a little higher to -0.3% (from -0.4% prior), the highest estimate since Mar 26  and off the -1.4% low estimate, but still firmly negative.
• Notably the estimates for Q1 real final sales to private domestic purchasers rose to 2.0% from 1.4%. That would be the slowest since 2022 and a pullback from 2.9% in Q4 2024, but still a reasonably solid measure of domestic demand without all of the major external distortions implied by gold imports.
• The next GDPNow update won't be for another week (Apr 16), after retail sales/inventories and industrial production data.