We have an empty calendar today on the data front, so at best the focus will be on central bank speakers as we try to gauge their next moves following the recent developments on the trade front.
The most important one should be Fed’s Waller, who recently become one of the most dovish members. He laid out two scenarios last month. In the first scenario, the average global tariff rate would be above 20% and he would be willing to look through inflation and cut rates on a slowdown in the economy.
In the second scenario, the average global tariff rate would be 10% and he would be willing to hold rates steady for longer and cut in the latter half of the year.
The second scenario is what is playing out and it will be interesting to hear whether he confirms that and switches back to a more hawkish stance
