OK META getting rid of their workforce by 10% or 8000 jobs
What does that mean? Cutting the fat? Getting rid of worthless jobs?
BIGGEST CAPITAL EXPENDITURE has now been cut by 10%
This should increase the EPS and Retained Revenue
Do you think AI will actually do that good of a job of replacing people? For me NOT A CHANCE
Let me share a banking experience with US Bank and their technical upgrades.
Big Earnings this week: VZ, GM, V, UPS, KMB, TMUS, GOOG, AMZN, F, MSFT, META, QCOM, MA, AAPL. CVX
Oops : NFLX but……
Earnings –
AAPL 4/30 AMC
BABA 5/14 est
BIDU 5/13 est
CVS 5/06 BMO
DIS 5/06 est
F 4/29 AMC
GOOGL 4/29 AMC
META 4/29 est
MSFT 4/29 AMC
MSTR 4/29 est
MU 6/23 est
NVDA 5/20 AMC
O 5/06 AMC
OWL 4/30 BMO
PLTR 5/04 est
UAA 5/14 est
V 4/28 AMC
VZ 4/27 BMO
WMT 5/21 AMC
https://www.briefing.com/the-big-picture
The Big Picture
Last Updated: 17-Apr-26 15:30 ET | Archive
From red lines to record highs
Briefing.com Summary:
*Ceasefire signals de-escalation with Iran triggered short covering, cash deployment, and rapid shift from correction fears to record highs.
*Key risks reversed: oil, yields, and S&P rebounded sharply, fueling momentum, FOMO, and speculative buying in high-beta stocks.
*Rally now driven by AI enthusiasm, mega-cap strength, and rising earnings estimates, though consumer weakness could threaten growth outlook.
The stock market has had a monster rally, and we saw it coming. Maybe not the monster part, but certainly the rally part.
Our concluding thought in our March 27 column was this:
With the S&P 500 nearing a 10% correction and some other important red lines coming into focus, there is an opportunity to start legging into the market with cash sitting on the sidelines. However, with other issues lurking out there, like the private credit worries, rising mortgage default rates, tariffs, and AI disruption, it is not an “all-in” environment because it is tough to be all-in like before on the achievability of earnings estimates.
In short (covering) order, the market has gone from red lines to green lights and record highs.
The Beginning of the End
What happened? We’re going to skip to the end before we go back to the beginning.
President Trump issued a threat in late March that the U.S. would destroy Iran’s power and energy infrastructure if a ceasefire deal isn’t reached and the Strait of Hormuz is not immediately open for business. Then, there were reports that the president was willing to end the war with Iran, even if the Strait of Hormuz was not fully open.
The market read between those lines that the president might be seeking an off-ramp from the war.
The ebb and flow of this contentious matter continued, though, with a subsequent warning from the president that a whole civilization will die if Iran did not meet an 8:00 p.m. ET deadline on April 7 to open the Strait of Hormuz.
It was at a boiling point of being a worst-case scenario, so there was much relief when the president announced ahead of the deadline that the U.S. and Iran had agreed to a two-week ceasefire agreement. The market read between those lines: the beginning of the end was at hand.
It was a headline that unleashed a wave of short-covering activity, a scurry by money managers to rebalance, and a move by investors to put cash sitting on the sidelines back to work.
A Good Monster
What red lines were crossed? From our vantage point, they were oil trading above $100/bbl, average gas prices above $4.00/gallon, a move in the 10-yr note yield to 4.30% but particularly above 4.50%, and a 10% correction in the S&P 500 that would take it to the 6300 area.
These were laid out in our March 5 column.
WTI crude prices peaked at $117.63/bbl on April 7; average gas prices hit $4.15/gallon a week ago; the 10-yr note yield got as high as 4.46% on March 27; and the S&P 500 hit a low of 6316.91 on March 30.
Today, oil prices went as low as $78.97/bbl with news that the Strait of Hormuz will be opened for all to transit, except Iran, until it agrees to U.S. conditions; average gas prices are at $4.07/gallon (but should be falling further); the 10-yr note yield is at 4.25%, and the S&P 500 (oh, the S&P 500!) hit an all-time high of 7140.10, up 13% from the March low in a span of just 13 trading sessions.
That is a good monster that scares the living cash out of investors sitting on the sidelines, fearful of missing out on further gains. It is the monster that fuels momentum trading and speculative energy into high-beta names.
It is a monster, the degree of which we did not see coming.
Briefing.com Analyst Insight
With the Iran war going from boiling to simmering, the market was free to divert its attention to other matters. Specifically, it got reacquainted with mega-cap stocks, it found comfort in bank CEOs downplaying the systemic risk of problems swirling in the private credit market, it embraced the AI boom again, and it seized on an otherwise impressive earnings growth outlook.
The forward 12-month EPS estimate has risen from $317.69 at the start of the Iran war to $335.25 today; meanwhile, the CY26 EPS estimate has increased from $309.82 to $320.23, the latter of which is an 18.5% increase over CY25.
There is a lot of faith in the ability of companies, in aggregate, to live up to those high expectations. So far, there haven’t been any convincing warnings that the end of this strong growth outlook is also at hand, but it may not be the kind of smooth sailing the estimate trend suggests if real earnings and real spending continue to dwindle in the face of higher prices.
That is something to keep a close watch on in the months ahead, because if the consumer pulls back harder on the discretionary reins, the strong earnings growth won’t materialize as expected, and a bad correction monster could show itself again.
For now, though, the stock market is wrapped up in a good, monstrous rally as it believes the Iran war is about to wrap up without lasting economic damage.
—Patrick J. O’Hare, Briefing.com
(Editor’s note: The next installment of The Big Picture will be published the week of April 27).
Where will our markets end this week?
Higher
DJIA – Bullish
SPX – Bullish
COMP – Bullish
Where Will the SPX end April 2026?
04-27-2026 +2.5%
\04-20-2025 +2.5%
04-13-2026 +2.5%
04-06-2026 +2.5%
Earnings:
Mon: BBBY, NUE, VZ
Tues: BP, KO, HLT, JBLU, KMB, UPS, HOOD, TMUS, WM, GM, V
Wed: GEHC, GD, HUM, PSX, YUM, CMG, EBAY, MAT, MGM, GOOG, AMZN, F, MSFT, META, QCOM
Thur: MO, BMY, CAH, CAT, COP, CROX, LLY, HSY, H, IP, TAP, TROW, VLO, BZH, CLX, FSLR, GDDY, MA, AAPL, TWLO,
Fri: CL, D, EL, CVX,
Econ Reports:
Mon:
Tue: FHFA Housing Price Index, S&P Case Shiller, Consumer Confidence
Wed: MBA, New Home Sales, Housing Starts, Building Permits, Durable Goods, Durable ex-trans, FOMC Rate Decision
Thur: Initial Claims, Continuing Claims, GDP, GDP Deflator, Employment Cost Index, PCE, PCE Core, Personal Income, Personal Spending, Chicago PMI
Fri: Construction Spending, ISM Manufacturing,
How am I looking to trade?
Rolled up OTM puts to closer to ATM or slightly OTM
www.myhurleyinvestment.com = Blogsite
info@hurleyinvestments.com = Email
Questions???
https://finance.yahoo.com/markets/stocks/articles/netflix-q1-earnings-snapshot-201648520.html
Netflix: Q1 Earnings Snapshot
Associated Press
Thu, April 16, 2026 at 2:16 PM MDT 1 min read
LOS GATOS, Calif. (AP) — LOS GATOS, Calif. (AP) — Netflix Inc. (NFLX) on Thursday reported first-quarter profit of $5.28 billion.
The Los Gatos, California-based company said it had net income of $1.23 per share.
The results topped Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of 76 cents per share.
More from Yahoo Scout
How much profit did Netflix generate in Q1?
How did Netflix’s Q1 earnings compare to analyst expectations?
What were Netflix’s revenue figures for the first quarter?
What is Netflix’s revenue guidance for upcoming quarters?
The internet video service posted revenue of $12.25 billion in the period, also exceeding Street forecasts. Nine analysts surveyed by Zacks expected $12.17 billion.
For the current quarter ending in June, Netflix said it expects revenue in the range of $12.57 billion.
The company expects full-year revenue in the range of $50.7 billion to $51.7 billion.
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This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on NFLX at https://www.zacks.com/ap/NFLX
https://finance.yahoo.com/news/netflix-just-let-investors-down-on-this-metric-too-120212642.html
Netflix just let investors down on this metric too
Netflix (NFLX) appears to have forgotten its stock buyback plans in the first quarter.
Wall Street isn’t happy about it and a host of other elements in the streaming giant’s late Thursday earnings report.
Netflix only repurchased $1.3 billion of its stock in the first quarter, a slower pace than the $2.3 billion quarterly average in 2025. With Netflix shares falling 1% in the first quarter due to lingering concerns about the price tag for Warner Bros. Discovery (WBD) — a deal Netflix has since dropped — the lack of more aggressive buying of the stock could be viewed as a red flag by investors.
What’s more, executives told Wall Street on its earnings call that there are no changes to its capital allocation program, despite their positivity around new podcasts, vertical videos, and live events.
About $6.8 billion remains for repurchase under Netflix’s authorization.
So if Netflix intends to be an aggressive buyer of its stock as a show of confidence in its future fundamentals this quarter and into year-end, it will likely come as a surprise to the Street.
“Recall, after large scale M&A was called off, investors suspected Netflix may increase its share repurchases and raise its fiscal year 2026 margin outlook, which incorporated 50 basis points of M&A expenses,” Citi analyst Jason Bazinet wrote in a note. “In addition, some investors suspected the US price hike was previously not incorporated in the guidance. However, management suggested no change to their capital allocation strategy, maintained the FY26 outlook, and provided worse-than expected 2Q26 guidance. As such, we’d expect shares to trade lower (especially given the recent run in the equity).”
Netflix shares tanked 10% in premarket trading on Friday.
Netflix’s earnings day came up short elsewhere too.
Investors were frustrated that Netflix failed to raise its full-year 2026 revenue guidance from $50.7 billion to $51.7 billion.
The company’s full-year operating margin guidance of 31.5% came in below the 32% analysts had modeled, suggesting that the “breakup fee” gains are masking higher content amortization costs.
And adding to the uncertainty, longtime chairman Reed Hastings announced he is officially stepping down, marking the end of an era just as the company faces increasing pressure to prove its advertising business can truly scale.
“Our overall view is that Netflix is properly valued at current levels and we believe increasingly growth is likely to be driven by price increases (and advertising gains off a relatively low base) rather than subscriber growth,” Pivotal Research Group analyst Jeff Wlodarczak wrote in a note, adding, “We view the story as lacking excitement relative to a rich valuation.”
Wlodarczak reiterated a Hold rating on Netflix shares.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
Are large layoff announcements a sign of something bigger?
Sam Boughedda
Fri, April 24, 2026 at 10:39 AM CDT
Investing.com — Recent high-profile layoff announcements from major technology companies are drawing attention, but Wolfe Research believes the trend may be less alarming than it appears.
Meta and Microsoft announced this week that they would cut their respective workforces by 10% and 7%. The moves follow similar headcount reductions from Oracle, Snap, Amazon and others.
Despite the wave of announcements, Wolfe Research analyst Chris Senyek told investors in a note that the broader U.S. labor market remains stable.
The firm continues to believe the market is in a “no hire, no fire” environment, with employment indicators holding steady.
Some observers have pointed to rising AI adoption as a primary driver of the cuts, but Wolfe Research pushes back on that interpretation.
Senyek wrote that the announcements “can be attributed to a renormalization in technology company employees after the sharp growth since the COVID-19 pandemic.” In other words, the firm sees the layoffs as a correction rather than a structural shift.
“After years of over-hiring and retaining employees when labor was scarce, companies are returning to a more efficient labor force,” Senyek wrote.
Mortgage rates sink again, and homebuyers jump back in
Published Wed, Apr 22 20267:00 AM EDTUpdated Wed, Apr 22 20268:26 AM EDT
Diana Olick@in/dianaolick@DianaOlickCNBC@DianaOlick
Key Points
- The average rate for 30-year fixed-rate mortgages with conforming loan balances decreased to 6.35% from 6.42%
- Last year at this time, the 30-year fixed was 55 basis points higher.
- Applications for a mortgage to purchase a home rose 10% for the week.
Mortgage rates dropped for the third straight week, boosting demand from both homeowners and homebuyers. The spring housing market had been looking like a letdown, but there appears to now be new life.
Total mortgage application volume rose 7.9% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, decreased to 6.35% from 6.42%, with points falling to 0.61 from 0.62, including the origination fee, for loans with a 20% down payment.
“Mortgage rates declined last week as financial markets responded positively to the Middle East ceasefire and the lower trend in oil prices,” said Mike Fratantoni, MBA senior vice president and chief economist, in a release.
Applications for a mortgage to purchase a home rose 10% for the week and were 14% higher than the same week one year ago. This, after buyer demand had briefly sunk below year-ago levels. The increase was led by conventional purchase loans, up 11% over the week.
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“Despite the geopolitical uncertainty, housing demand is being supported by a still resilient job market, and homebuyers are experiencing a buyer’s market in most of the country given the higher levels of inventory relative to last year,” said Fratantoni.
Refinance demand, which is most sensitive to weekly rate moves, rose 6% for the week and was 52% higher than the same week one year ago. Last year at this time, the 30-year fixed was 55 basis points higher.
Mortgage rates rose slightly to start this week, according to a separate survey from Mortgage News Daily, but continue to be volatile amid mixed signals from President Donald Trump on the war with Iran.
“There was some upward pressure on rates from stronger employment data in the morning [Tuesday], but the market was even more focused on the uncertain status of US/Iran peace talks,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.
Apple taps John Ternus as CEO to replace Tim Cook, who will become chairman
Published Mon, Apr 20 20264:34 PM EDT
Updated Mon, Apr 20 20266:26 PM EDT
Jonathan Vanian@in/jonathan-vanian-b704432/
Jennifer Elias@in/jennifer-elias-845b1130/
Key Points
- Apple said on Monday that John Ternus is succeeding Tim Cook as CEO, with Cook assuming the role of executive chairman on Sept. 1.
- Ternus, a senior vice president of hardware engineering, will join Apple’s board of directors when he becomes chief.
- Apple’s market cap increased by more than 20-fold on Cook’s watch, closing on Monday at $4 trillion.
Apple said on Monday that John Ternus is succeeding Tim Cook as CEO, with Cook assuming the role of executive chairman on Sept. 1.
Ternus, a senior vice president of hardware engineering, will join Apple’s board of directors when he becomes chief. Apple’s nonexecutive chairman Arthur Levinson will become the iPhone maker’s lead independent director at that time.
“Cook will continue in his role as CEO through the summer as he works closely with Ternus on a smooth transition,” Apple said in a press release. The company said in a filing that the board made the appointment on Friday.
It’s the first CEO transition for Apple since Cook, now 65, succeeded Steve Jobs at the helm in 2011, shortly before Jobs’ death. Ternus will become Apple’s eighth CEO.
“It has been the greatest privilege of my life to be the CEO of Apple and to have been trusted to lead such an extraordinary company,” Cook said in a statement. “I love Apple with all of my being, and I am so grateful to have had the opportunity to work with a team of such ingenious, innovative, creative, and deeply caring people who have been unwavering in their dedication to enriching the lives of our customers and creating the best products and services in the world.”
Tim Cook to become Executive Chairman of Apple, John Ternus to take over as CEO
Apple also said that Johny Srouji will become chief hardware officer, taking over for Ternus in an expanded role. Srouji, who most recently served as the company’s senior vice president of hardware technologies, will also lead hardware engineering.
Apple’s market cap increased by more than 20-fold on Cook’s watch, closing on Monday at $4 trillion. Cook took home $74.6 million in total compensation last year, including a $3 million base salary and millions more in stock awards, according to recent regulatory filings. Forbes estimates his net worth at close to $3 billion.
However, as Cook exits, Apple faces numerous challenges, including an increasingly complex supply chain, geopolitical tensions, the Trump administration’s tariffs and a memory crunch tied to soaring demand for AI chips.
Ternus, 50, has been Apple’s hardware boss and has worked at Apple for about half his life, joining just four years after he graduated from the University of Pennsylvania with a degree in mechanical engineering. He’s been widely viewed as next in line, with recent profiles in The New York Times and Bloomberg. His portfolio has included oversight of the hardware engineering teams behind the iPhone, iPad, Mac, Apple Watch, AirPods and Vision Pro.
Ternus came to Apple in 2001 after a four-year stint as a mechanical engineer at Virtual Research Systems. At Apple, he worked on the product design team, and in 2013 he became a vice president of hardware engineering.
Revamping the supply chain
During his almost 15-year tenure, Cook oversaw Apple’s jump into wearable technology, with the rollout of the Apple Watch, AirPods and the virtual reality headset Vision Pro, which has struggled to find market adoption since its release in 2024.
Revenue almost quadrupled under Cook, climbing to over $400 billion in the latest fiscal year. Cook is best known in Silicon Valley as an operations guru, revamping Apple’s supply chain after joining in 1998 as an executive vice president of worldwide sales and operations. When he arrived, Apple was near bankruptcy.
Cook became one of Jobs’ loyal lieutenants and was elevated to the role of operations chief in 2005. Before joining Apple, Cook cut his teeth in the tech industry spending 12 years working at IBM, helping the company manufacture computers. He also spent time at former PC maker Compaq as a vice president of corporate materials. Cook graduated from Auburn University in 1982 and received an MBA from Duke University in 1988.
For Ternus, perhaps the most critical aspect of his new job will be pushing the company deeper into artificial intelligence, where it’s lagged many of its megacap peers.
While the iPhone 17 has done well, Apple has faced criticism from investors and technologists for a perceived lack of cutting-edge AI technology. That criticism grew after Apple last year delayed an upgrade to its Siri voice assistant. In December, Apple revamped its AI leadership, replacing its former chief with a Google veteran.
The company has said it will launch an updated version of Siri this year based on a Google Gemini AI model.
Since product designer Jony Ive left Apple in 2019, the company has been operating without one of its cornerstone executives credited with making its flagship iPhone aesthetically appealing to the masses.
Ive has since joined OpenAI, which in May 2025 said it would acquire the design guru’s startup in an all-equity deal worth about $6.4 billion.
In recent years, Cook acted as a public statesman to advance Apple’s interests, meeting with both foreign and domestic leaders. Initially, he pushed for increased internet privacy protections around the world. In 2016, he notably clashed with the U.S. government over whether Apple would have to help unlock an encrypted iPhone used by a criminal gunman in San Bernardino, California. Cook said to do so would threaten users’ privacy, and the FBI eventually found a different way to unlock the device.
Of late, much of Cook’s public lobbying has focused on President Donald Trump, who has threatened and repealed several tariffs on imports from China and other Asian countries where Apple does big business.
In August, Cook visited the White House, appearing with Trump, to tout an announcement that Apple would spend $600 billion in the U.S. over the next five years.
At the August meeting, Trump, who once referred to Cook as “Tim Apple,” read a list of the company’s commitments next to Cook and said, “I love that you’re doing this.”
Dan Ives, an analyst at Wedbush Securities, told CNBC’s “Fast Money” that the timing of Cook’s exit is surprising.
“The view is he was going to stay on maybe for another year,” Ives said. “You know, he’s even sort of made comments about it in terms of staying.”
Cook used a “Good Morning America” appearance last month to shut down growing speculation about his future at the company, telling viewers that retirement talk is nothing more than a rumor.
Asked about reports that he was preparing to step aside, Cook told ABC, “No, I didn’t say that. I haven’t said that. I love what I do deeply. Twenty-eight years ago, I walked into Apple, and I’ve loved every day of it since.”
— CNBC’s Jordan Novet contributed to this report.
Correction: An earlier version of this story had the incorrect age for Ternus.
Here are all the ways the Iran war has affected the U.S. economy so far
Published Wed, Apr 15 202611:41 AM EDT
Updated Wed, Apr 15 20261:13 PM EDT
Jeff Cox@jeff.cox.7528@JeffCoxCNBCcom
Key Points
- The Iran war is starting to show up in ways both obvious and not so much, with soaring energy costs leading the impact and potential hits on broader growth simmering beneath the surface.
- Should the current ceasefire hold, inflationary impacts will wear off. If fighting resumes, however, the future becomes much murkier, threatening the fragile growth the economy has seen.
- Oil prices will be key. Joseph Brusuelas, chief economist at RSM, drew a line at $125 a barrel for West Texas intermediate crude as the point where “it becomes more of an economic problem.”
- Inflation data is where the war’s impact shows up most directly, and the news so far has been mixed.
The Iran war is starting to show up in the U.S. economy in ways both obvious and not so much, with soaring energy costs leading the impact and potential hits on broader growth simmering beneath the surface.
Though recession fears have grown since the fighting began more than six weeks ago, most economists think the war will have only modest effects on gross domestic product — maybe shaving off a few tenths of a percentage point overall.
But there’s an important caveat, mainly around duration: Should the current ceasefire hold, inflationary impacts will wear off. If fighting resumes, however, the future becomes much murkier, threatening the fragile growth the economy has seen over the past two quarters.
“It’s going to gouge out some of the growth, but we’ll weather through it,” said Mike Skordeles, head of U.S. economics at Truist Advisory Services. “The bigger issue is the uncertainty.”
Indeed, uncertainty has hung over the U.S. economy for most the past year, ever since President Donald Trump unveiled his “liberation day” tariffs in early April 2025 and continuing through what has become an increasingly muscular and aggressive foreign policy.
The war has intensified the pressure, resulting in a host of questions: whether the inflation surge during the war is temporary, how much conditions will affect the consumers who drive most U.S. economic growth, and the extent to which less energy-independent nations are hurt by the war fallout.
Underlining all of it is how the Federal Reserve and other central banks will respond.
“Iran’s important. The price of crude oil is important. Other things matter more. Incomes and other things are continuing to hang in there,” Skordeles said. “The other piece of that uncertainty is by the Fed that’s delaying — and I think it’s delaying, not canceling — any sort of additional cuts, pushing them into the back half or even later in the year. That means you’re elevating borrowing costs for consumers.”
Core inflation will fall if Iran war ends relatively soon, says Apollo Global’s Torsten Slok
Suffering at the pump
High rates come at a bad time with prices at the pump — most recently at national average $4.10 a gallon, according to AAA — already hitting consumers. A spike in mortgage rates also helped drive existing home sales in March to their lowest in nine months.
Still, debit and credit card spending surged 4.3% in March, the most in more than three years, according to Bank of America.
That was powered by a 16.5% jump in spending at gas stations. But there also was “healthy growth” of 3.6% excluding gas, the bank said, indicating that wallets were still resilient enough to handle the increase.
One factor expected to help sustain consumers is bigger tax refund checks following changes made in last year’s One Big Beautiful Bill Act. The average refund this year has been $3,521, an 11.1% increase over the same period in 2025, according to IRS data.
Higher spending, though, doesn’t square with consumer sentiment surveys.
In fact, the widely followed University of Michigan survey showed sentiment at a record low in numbers going all the way back to the 1950s — through multiple wars, 1970s stagflation, the Sept. 11, 2001, terror attacks, the global financial crisis and the Covid pandemic.
But the link between low sentiment and economic activity can be tenuous. Consumers can often say one thing and do another.
“A fall in consumer sentiment has never been a reliable predictor of actual consumer behavior and we expect real consumer spending to continue to grow, albeit slowly, rising by 0.8% over the course of this year and 1.7% over the course of 2027,” David Kelly, chief global strategist at JPMorgan Asset Management, said in his weekly market note.
Oil prices will be key.
Joseph Brusuelas, chief economist at RSM, drew a line at $125 a barrel for West Texas Intermediate crude, the U.S. benchmark, as the point where “it becomes more of an economic problem.” Oil traded near $91 Wednesday morning, below a $115 peak it briefly topped earlier in April.
“That’s where demand destruction begins to accelerate and broaden out. So we’re some ways away,” Brusuelas said. “I’m not ready to say that we’ve experienced structural scarring. We’re not there yet, because I don’t know the extent of the damage to physical production and refining capacity,” in the Middle East.
Lowering expectations
Economists expect the net impact of the war will be somewhat slower growth but not a major breakdown.
Goldman Sachs a few days ago cut its GDP forecast this year to 2%, measured from fourth quarter to fourth quarter, a reduction of half a percentage point from its prior outlook. The Atlanta Fed projects that first-quarter growth will total just 1.3%, better than the meager 0.5% growth rate in Q4 but below earlier estimates for 3.2%.
The Wall Street investment bank also noted that “weaker activity growth is likely to translate to weaker hiring and a higher unemployment rate,” which it now sees at 4.6% by year’s end, just a 0.3 percentage point gain from the March level.
Combined, Goldman expects the impact to push the Fed into multiple interest rate cuts later this year.
Capital is coming back into U.S. as energy hits international markets: Goldman’s Wilson-Elizondo
“The spike in oil prices, increased uncertainty about the outlook, and the strong [March] employment report have kept the Fed firmly in wait-and-see mode for now,” Goldman economists Jessica Rindels and David Mericle said in a note. “We expect a combination of rising unemployment and limited progress on inflation — where tariff effects dropping out should outweigh incoming energy passthrough — will make the case for two cuts in September and December.”
That’s a more aggressive forecast than current market pricing, which indicates no cuts until at least mid-2027. Fed officials in March penciled in one reduction.
The most obvious obstacle standing in the Fed’s way is inflation.
Prior to 2026, the expectation was that the central bank would continue lowering rates to support a slowing labor market. Job growth has been little changed over the past year, and negative when subtracting health care-related positions.
But persistent inflation would derail the Fed and possibly set off a negative chain of events through the year.
Global fallout
Inflation data is where the war’s impact shows up most directly, and the news so far has been mixed.
Predictably, headline inflation has leaped higher. The consumer price index for all items rose 0.9% in March, putting the annual inflation rate at 3.3%. Stripping out food and energy, though, left the monthly increase at just 0.2% and the annual core level at 2.6% — still above the Fed’s 2% bogey but moving in the right direction.
Similarly, the producer price index, which measures increases at the wholesale level, accelerated 0.5% on headline but only 0.1% for core.
Interestingly, the New York Fed’s monthly consumer survey, which is much less volatile than the University of Michigan’s version, saw one-year inflation expectations in March at 3.4% — up 0.4 percentage point monthly but well below the 4.8% outlook from the Michigan survey.
Dealing with inflation isn’t just a U.S. problem. Indeed, the bigger impact, particularly from the oil component, could be felt more in Europe and especially Asia, which relies heavily on Middle East fuel sources to power its economies.
“We’re feeling a price shock because of energy, but not really a supply shock,” Skordeles, the Truist economist, said. “Asia is the one getting clobbered, because they’re the big users.”
The war has shaken up supply chains, an impact expected to be felt more keenly in the coming months as raw materials flows tighten and start to reflect a pass-through from the higher energy prices.
The New York Fed’s Global Supply Chain Pressure Index in March hit its highest level since January 2023.
Whether there are knock-on effects in the U.S. is still undetermined, though the sentiment — so far — is that the impact will be limited.
“Energy costs, although they’ve increased in the last few years, they’re still much cheaper than they are relative to prior decades,” Skordeles said. “We’ll suffer through it. It’ll impact growth, but it’s not game over.”
Correction: In the New York Fed’s monthly consumer survey, one-year inflation expectations in March were at 3.4% — up 0.4 percentage point monthly. An earlier version misstated a figure.
