These headlines may not have moved markets yesterday, but they describe general trends in financial markets or events that may impact the longer-term. Due to the longer-term focus, this section may not be updated daily.
Test trest test
Jeffrey Lacker, the Federal Reserve Bank of Richmond President, announced on Tuesday that he would be stepping down due to his involvement in an alleged leak of confidential information back in 2012. In October 2012, Mr. Lacker spoke with an analyst from a firm called Medley Global Advisors. That analyst had confidential information around Fed policy options, and Mr. Lacker believes he may have confirmed or acknowledged the private information. Although Mr. Lacker was expected to retire from the Fed on October 1 of this year, his early departure is important because 1) Lacker was considered to be “hawkish” – meaning he favored higher interest rates and 2) Although Trump will not be nominating Lacker’s replacement since this is for a regional bank position, between now and June 2018 Trump does have the option to renominate or replace Fed Chair Janet Yellen as well as Vice Chair Stan Fischer, meaning the Fed (which sets the level of interest rates) could look a lot different very soon.
PM May triggers ‘historic’ Brexit – Reuters
On March 29, Prime Minister Theresa May officially triggered Article 50 of the EU’s Lisbon Treaty and notified EU President Donald Tusk that Britain would be leaving the European Union. This follows the June 2016 referendum vote in which 51.9% of British citizens voted to leave the EU. The Prime Minister now has 2 years to negotiate the terms of Brexit before it comes into effect in March 2019. May’s challenge will be to negotiate with the other 27 EU states on issues such as trade, security, and finance, while also managing renewed calls from Scotland nationals for their own independence referendum.
Donald Trump has said his infrastructure plan could top $1 trillion in spending to improve the electrical grid and water systems, and rebuild roads, airports, and bridges, among other things. He also promised to speed up approval of infrastructure projects and to cut red tape, saying he would not fund projects that could not be started within 90 days. The stock market rally has been driven by hopes around Trump’s promises to cut corporate taxes, push regulation, and fund infrastructure spending. However, the setback to the administration seen a couple of weeks ago in their efforts to repeal and replace Obamacare has led many to doubt what Trump will be able to get through Congress. While unlikely to happen anytime soon as Republicans continue to focus on their other agenda items, if Trump is able to pass a large infrastructure bill, that would be a positive for stocks.