On May 3, 2025, CEO Warren Buffett of Berkshire Hathaway announced that he plans to resign at the end of this year and proposed that the board of directors appoint Greg Abel as his successor.
The announcement was made during Berkshire's annual shareholder meeting. Here, the investment legend warned about Trump's tax increase plans and reassured investors amid recent market fluctuations. He stated that he has no intention of selling Berkshire shares and will continue to support the company if needed.
The US stock market last week closed with a strong upward trend. The S&P 500 index recorded its longest winning streak since November 2004, completely erasing the decline after Liberation Day. The market was driven by positive April employment reports and expectations surrounding the US-China trade negotiations.
However, this upward momentum will face challenges from the Federal Reserve (Fed).
The Fed will announce its policy decision on May 7. Although the market predicts that the Fed will keep interest rates unchanged in this meeting, the remarks of Chairman Jerome Powell regarding the economic outlook are still closely monitored by investors.
In addition, investors will also monitor data on the number of unemployment benefit claims and production figures. The earnings reporting season continues to be active with some major names like Ford, Palantir, Disney, and AMD.
In the context of Mr. Trump's tariff policies not clearly reflected in economic data, the Fed will have to assess carefully before making its next move.
Recent economic data is sending mixed signals. Consumer confidence shows signs of weakening, but the labor market and household spending remain stable.
The April jobs report showed that the economy added 177,000 new jobs, and the unemployment rate was stable at 4.2%. This reinforces the prediction that the Fed will not be in a hurry to adjust interest rates.
However, it is still unclear what the next direction of the Fed will be, as they are still trying to balance between two objectives: controlling inflation and maintaining the stability of the labor market.
The GDP data for the first quarter released last week showed that the U.S. economy contracted while inflation increased in the first quarter. This poses a difficult challenge for the Fed, forcing policymakers to potentially prioritize one of the two aforementioned goals.
According to JPMorgan economist Michael Feroli, the latest employment data eliminates the possibility of the Fed taking action in this week's meeting, even in June. He maintains his prediction that the Fed will begin a rate easing cycle in September.
After the jobs report was released, the probability of the Fed cutting interest rates in June has dropped significantly. According to the CME FedWatch tool as of last Friday, investors now predict only a 37% chance that the Fed will lower rates by 25 basis points next month, down from 55% the day before.
President Trump is not pleased with this change. He continues to pressure the Fed with a statement on Truth Social: "NO INFLATION, FED MUST CUT INTEREST RATES!!!"
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All Eyes Are on Chairman Jerome Powell and the Fed Meeting This Week
On May 3, 2025, CEO Warren Buffett of Berkshire Hathaway announced that he plans to resign at the end of this year and proposed that the board of directors appoint Greg Abel as his successor. The announcement was made during Berkshire's annual shareholder meeting. Here, the investment legend warned about Trump's tax increase plans and reassured investors amid recent market fluctuations. He stated that he has no intention of selling Berkshire shares and will continue to support the company if needed.
The US stock market last week closed with a strong upward trend. The S&P 500 index recorded its longest winning streak since November 2004, completely erasing the decline after Liberation Day. The market was driven by positive April employment reports and expectations surrounding the US-China trade negotiations. However, this upward momentum will face challenges from the Federal Reserve (Fed). The Fed will announce its policy decision on May 7. Although the market predicts that the Fed will keep interest rates unchanged in this meeting, the remarks of Chairman Jerome Powell regarding the economic outlook are still closely monitored by investors. In addition, investors will also monitor data on the number of unemployment benefit claims and production figures. The earnings reporting season continues to be active with some major names like Ford, Palantir, Disney, and AMD. In the context of Mr. Trump's tariff policies not clearly reflected in economic data, the Fed will have to assess carefully before making its next move. Recent economic data is sending mixed signals. Consumer confidence shows signs of weakening, but the labor market and household spending remain stable. The April jobs report showed that the economy added 177,000 new jobs, and the unemployment rate was stable at 4.2%. This reinforces the prediction that the Fed will not be in a hurry to adjust interest rates. However, it is still unclear what the next direction of the Fed will be, as they are still trying to balance between two objectives: controlling inflation and maintaining the stability of the labor market. The GDP data for the first quarter released last week showed that the U.S. economy contracted while inflation increased in the first quarter. This poses a difficult challenge for the Fed, forcing policymakers to potentially prioritize one of the two aforementioned goals. According to JPMorgan economist Michael Feroli, the latest employment data eliminates the possibility of the Fed taking action in this week's meeting, even in June. He maintains his prediction that the Fed will begin a rate easing cycle in September. After the jobs report was released, the probability of the Fed cutting interest rates in June has dropped significantly. According to the CME FedWatch tool as of last Friday, investors now predict only a 37% chance that the Fed will lower rates by 25 basis points next month, down from 55% the day before. President Trump is not pleased with this change. He continues to pressure the Fed with a statement on Truth Social: "NO INFLATION, FED MUST CUT INTEREST RATES!!!"