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Good morning.

Top of the morning to you.

Of course, it has nothing to do with today being St. Patrick’s Day … but there is some green on my stock screen which is quite a welcomed sight considering last week’s sharp declines.

Tariffs were … and continue to be … on everyone’s mind and the president is claiming there will be no exemptions on steel and aluminum tariffs.  One of the goals, of course, is to bring manufacturing back to the U.S. … but these things take time … a lot of time … and there is great concern over what happens in the meantime.

Just looking at unilateral tariffs, Associated Press reported that Philip Luck and Even Brown of the Center for Strategic and International Studies conclude that “unilateral tariffs will raise prices, cost American jobs, and strain alliances.” A present fear is this will raise production costs of such items as autos made in the U.S., which might be one reason the University of Michigan reports the view that the outlook for inflation even 5-10 years down the road had an extraordinary jump … and seems to be, by far, the highest it has been in many years.

Maybe this is why Reuters reports consumer sentiment is so low right now … even as consumers continue to buy … but at a lower pace than expected of late.

Only one more word on the tariffs, which might anger some … but there was an argument between a reporter and White House Press Secretary Karoline Levitt as she shared the view of the administration that tariffs are actually a tax cut … which most economists … and the writer of this note … certainly question … as added tariff costs are typically passed on to the consumer and could, in fact, strangle world trade.

All-in-all, the Fed has an incredibly difficult job this week … seemingly, more so than usual, having to juggle all the balls that are in the air right now … and everyone looks forward to Jay Powell’s comments on Wednesday as to how the governors see where the economy might be heading, the effect tariffs could have on their assessment and, most importantly, just what the Fed plans to do about it.

Do you remember the days when Fed meetings were really boring?

My … how I miss those days.

Have a great day,

Joseph G. Witthohn, CFA

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