In 30 seconds: A wave of US economic data releases showed mixed signals, with Philadelphia Fed manufacturing surging, industrial production declining, jobless claims falling, and inflation expectations rising, while bank trading revenues hit records and metro job growth diverged sharply across regions. The closure of the Strait of Hormuz has triggered a global oil supply shock, with Europe facing jet fuel shortages within six weeks, US crude exports hitting record highs, and analysts debating the severity and duration of the supply disruption and its cascading effects on trade deficits, bond markets, and global debt sustainability. China reported 5% GDP growth in Q1 driven by exports and industrial output, while analysts flagged that China's state banks conducted roughly $460 billion in foreign exchange purchases over the past year, raising the prospect of a US Treasury currency manipulation designation. Trump's threat to fire Fed Chair Jerome Powell before May 15 has reignited a legal and political dispute over who leads the Fed in the absence of a confirmed chair, with markets and economists warning of serious uncertainty and inflationary consequences if the Fed's independence is compromised.
The US economy is currently doing that thing where every indicator points in a different direction and you're left squinting at the dashboard wondering which gauge to trust. Start with manufacturing. The April Philadelphia Fed Manufacturing Index surged to 26.7, blowing past the 10.0 estimate and the prior reading of 18.1. New orders hit 33.0, shipments came in at 34.0, and employment edged up to 5.1. The catch: prices paid jumped to 59.3. Meanwhile, the Empire Manufacturing Index adjusted for ISM methodology rose 4 points to 57, its highest since 2022. Then there is industrial production, which fell 0.5% month over month against an estimate of 0.1%, though the prior month was revised up to 0.7%. On the labor side, initial jobless claims dropped to 207,000, below the 2,13000 estimate and the prior 2,18000. Continuing claims ticked up to 1.818 million, slightly above the 1.810 million estimate and the prior 1.787. The April NY Fed Services PMI prices paid index hit 73.8. Import prices excluding petroleum rose just 0.1% month over month, the smallest increase since September. The Misery Index sits at 7.6%. The geographic picture is equally uneven. Austin metro jobs vs. pre-COVID level: 23%. Major metros that have lost jobs since 2025: 21. The national story, as usual, is several very different local stories wearing a trench coat.
The gap between a barrel priced in West Texas at $87 and one delivered in Rotterdam at $140 is doing real work — that's not a paper abstraction, it's a physical market under stress. US federal debt service as a share of GDP is at record highs, exceeding defense spending for the first time in at least 65 years.
China posted 5% year-over-year GDP growth in first quarter of this year, a number that looks reassuringly on-target until you open the hood. The domestic side of the ledger is less flattering. China retail sales: 1.7%. You can run a 5% economy if enough of the growth leaves the country in shipping containers, but the strategy has a shelf life. Then there is the currency question. Economist Brad Setser argues that foreign exchange settlement is the single best proxy for China's true intervention. By that measure, China's state banks purchased $35 billion in March alone, and that March settlement did not appear on the balance sheet of the state banks, suggesting the intervention is being done through the backdoor. If Treasury decided to base its determination on activity in the second half of 2025 (and first quarter of 2026), the scale of intervention (measured by foreign exchange settlement) clears the existing thresholds. In other words, the raw material for a formal currency manipulation designation already exists, according to that analysis. A 5% headline is a fine thing. Whether it survives intact is another matter entirely.
Trump's latest threat to fire Powell has turned a suddenly live dispute into a concrete question: who actually leads the Federal Reserve if no chair is confirmed? Trump is calling for Fed Chair Jerome Powell's resignation ahead of May 15. The economics are no more comfortable than the law. Justin Wolfers frames the Fed's current predicament as two goals, one instrument, lousy trade-off. A weakening economy calls for easier policy, but rate cuts risk adding fuel to the price problem. Tim Duy warns: if the Fed backs up against a collapse, you get inflation and a falling dollar. Robert Kahn, a Eurasia Group expert, warns that the standoff could lead to uncertainty in the markets.
Here is what it costs to borrow money right now.
30-year fixed mortgage: 6.30%, down 7 bp on the week
15-year fixed mortgage: 5.65%, down 0.07% on the week
Auto loan rate (60-month): 7.52%, up 0.04% on the quarter
Credit card rate: 21.00%, up 0.14% on the quarter
Prime rate: 6.75%, flat on the day