The Week Ahead

Macro Movers

In my view, the FOMC meeting went pretty much as I anticipated: no change to rates, Powell said a lot without saying much, and the market initially cheered the return to “boring”.

Unfortunately, it was not enough to loosen the vice grip that pessimism stemming from soft data has on the market. By Friday, the post-FOMC rally had been erased—only salvaged by some “soothing” (for lack of a better term) tariff commentary from President Trump. Without it, the close might’ve been far uglier.

While the meeting itself was largely uneventful, the new dot plot (SEPs or dots) has both bulls and bears declaring victory.

• Bulls and doves see the unchanged rate cut projection—remaining at two—in combination with an increased inflation projection as a sign the Fed is willing to tolerate stubborn inflation during this particularly fragile macro period.
• Bears, meanwhile, point to the upward revision to inflation and downward revision to growth as evidence supporting the stagflation thesis.

As for me, I don’t place much weight on the dot plots themselves. In my experience, following them in a vacuum leads you astray more often than they steer you right. That said, they’re not entirely useless—they offer a look into how the committee is thinking, which provides an indirect read on the Fed’s reaction function.

The most important economic release this week comes Friday with February’s Personal Consumption Expenditures (PCE) report.

Given the softness in PPI—which feeds into PCE—I expect a dovish read. Until then, markets will chew through a mix of soft and hard data that could shape sentiment:

S&P Flash PMIs (March)

With growth concerns mounting, any upside surprise here should help calm nerves.

• Flash Services PMI: expected at 51.5 vs. 51.0 prior
• Flash Manufacturing PMI: expected at 51.5 vs. 52.7 prior

Conference Board (CB) Consumer Confidence

We don’t typically focus on this survey, but with soft data under the microscope, this print could move markets. Think of it like ADP before Payrolls—it won’t have the final say, but will start the conversation.

• Forecast: 95.0 vs. 98.3 in February

Initial Jobless Claims

This week’s estimate ticks slightly higher, but as long as claims stay well below the “danger zone” (250–300k), I doubt the market moves much on this print.

• Consensus is 226K vs. 223K last week.

2nd Revision to 24Q4 GDP

While this release does not align with the Atlanta Fed’s now-walked-back estimate for 25Q1, the impact it had on sentiment was demoralizing. A solid showing here—even from Q4—might help stabilize GDP concerns.

• 2.3% is the forecast, same as the preliminary.

Personal Consumption Expenditures (PCE) Index

The updated dot plot suggests the Fed is willing to tolerate some stickiness in inflation. That said, it would be better if their patience was left untested. A downside surprise would provide much-needed reassurance.

• Headline: 0.3% MoM, 2.5% YoY (unchanged from January)
• Core: 0.3% MoM, 2.7% YoY (vs. 0.3% and 2.6% in January)

UMich Consumer Sentiment for March (Final)

The initial March read missed big, but markets rallied anyway. Some took that as evidence the selloff on soft data had run its course. If so, this final print may confirm that. With expectations already in the gutter, a modest upside surprise could trigger relief.

• Consensus is 57.9: unchanged from the prior reading, which missed a 63.1 forecast.

Micro Movers

While this week’s earnings slate is full, macro remains the focus until mid-April when the next earnings season begins.

Until we get clarity on reciprocal tariffs, I believe the S&P 500 remains range-bound between 5,500 and 5,700. There’s simply no compelling reason to make wholesale moves—long or short—until that matter is resolved. Although the administration has set an April 2nd deadline, given the unpredictable nature of the messaging, it shouldn’t surprise anyone if the rollout is pushed forward… or delayed.

Tom Lee, a well-known Wall Street strategist, recently called this the U.S.’s “Brexit moment”. In 2016, the FTSE 100 (the UK’s benchmark index) sharply declined to start the year before establishing a trading range into the Brexit vote—despite the outcome resulting in what many economists viewed as the worse of two scenarios, the average rallied to new highs afterward. The takeaway: uncertainty was worse than the event itself. There’s precedent for political catalysts like these to act as clearing events.

Although imports only account for 11% of U.S. GDP, recent soft data and earnings commentary suggest tariff uncertainty is freezing decision-making across the board—from corporate capex to household spending. In my view, the worst-case scenario isn’t necessarily that tariffs go into effect, but that no clarity ever arrives. The longer this limbo extends beyond April 2nd, the more financial decisions get delayed. That delay in economic activity opens the door for a resilient economy to slow—or for a slowdown to tip into recession—ultimately showing up in weaker earnings, softer payrolls, and rising unemployment.

As such, similar to the Brexit analog, there’s a real case to be made that clarity alone—tariff or not—could prompt the market to rerate higher by providing the certainty needed to price in expectations around corporate and consumer behavior.

Fortunately, this week brings insight from two companies closely tied to small- and mid-sized businesses, giving us a window into how that vital part of the economy is navigating this uncertain landscape.

Small and Medium-Sized U.S. Businesses: PayChex (PAYX) & Cintas (CTAS)

Paychex and Cintas provide essential services to small and medium-sized businesses across the U.S. Cintas delivers uniforms, first-aid, and janitorial services, while Paychex handles payroll and benefits. If both companies report strong quarters and do not imply a slowdown in their commentary or guidance, it would suggest that this critical segment of the U.S. economy remains healthy despite the macro uncertainty.