Fed Preview: Jay-Hawk Swan Song

At its April meeting tomorrow at 2pm - the last for Jerome Powell as Chair - the Fed will remain firmly on hold.

In its preview of what to expected, Bank of America economist Aditya Bhave writes that the inflation outlook is arguably as cloudy as it was at the time of the March meeting. And even though equities are trading as though the Iran war is over, gas is still above $4 and traffic through the Strait of Hormuz is still highly disrupted. As a result, uncertainty about the impact of the conflict on core inflation remains elevated. Meanwhile, the recent labor data (March jobs, ADP, claims) show resilience and potentially some green shoots. To Bank of America, this should reduce the sense of urgency to shore up the labor market among the doves.