Macro Monday – May 5

The first week of May opens with a familiar theme: uncertainty layered over fragility. After weeks of volatile markets, policy shifts, and inflationary pressure, all eyes were on the Federal Reserve’s May 1 meeting, and the latest jobs report offered fresh insight into whether the economy is slowing—or simply catching its breath.

The Fed held interest rates steady, opting for a cautious tone. Chair Powell reiterated the Fed’s commitment to controlling inflation, even as signs of economic softening emerge. Markets initially wavered but stabilized, pricing in fewer rate cuts for the second half of 2025.

Meanwhile, the April jobs report painted a mixed picture. Job creation slowed slightly, with non-farm payrolls increasing by approximately 180,000–200,000 (based on early estimates), while wage growth remained modest but persistent. The unemployment rate hovered near 4%, holding steady but raising questions about labor market cooling.

Consumer confidence also continued to decline, with new sentiment surveys indicating growing concern over inflation, job security, and the potential impact of escalating trade tensions. Last week, President Trump’s administration reiterated threats of additional tariffs on key imports, including European auto parts and Chinese electronics, sending ripples through equity markets and supply chain forecasts.

The economy is walking a tightrope. Inflation is not fully tamed. Growth is slowing. Trade policy remains a wildcard. The Fed’s decision to hold may offer breathing room—but also signals it’s not confident enough to stimulate. Investors should expect increased sensitivity to upcoming data, especially earnings revisions, retail sales, and housing market trends.

At VenQuest, we continue to monitor these developments carefully, adjusting our strategies to remain both resilient and opportunistic in this environment of elevated uncertainty.