Economic and Market Commentary – April 2026
- May 28
- 5 min read
Economic and Market Commentary – April 2026
Throughout April, the ongoing conflict in the Middle East extended into its second month, with the vital Strait of Hormuz still effectively blockaded, stymying the critical transportation of oil, liquified natural gas, fertilizer, and other essential commodities to their typically scheduled end destinations across the globe. In fact, endeavoring to assert dominance and flex its military prowess, the U.S. Navy had established a blockade of the blockade, ultimately bestowing itself with sole discretion and authority regarding which tankers and cargo vessels enter and exit the Strait (and Iranian ports), subjecting any dissidents to the maritime force’s wrath. In short, Treasury yields have climbed, oil prices remained elevated (Brent Crude: $114.01/bbl, WTI: $105.07/bbl), inflation readings saw sharp upticks, and prices at the pump continued to rise across the country with the national average at $4.30/gal, all contributing to drive consumer sentiment into the depths. Conversely, general employment statistics painted a mosaic of a labor market exuding overall signs of stabilization, albeit mired in a low-hire/low-fire stasis, and a stock market – seemingly dismissive and detached from geopolitical events and macroeconomic fundamentals – that had not only recovered from its March lows, but had surged to multiple, new all-time highs.
Aside from the geopolitical situation, monetary policy proceedings and the overall constitution of the Federal Reserve attracted headlines on Wall Street. On April 29, at the conclusion of the Fed’s third policy meeting of the calendar year, and what was presumably the last meeting that would see Chairman Jerome Powell at the helm of the central bank, the FOMC voted 8-4 to leave its overnight benchmark rate unchanged, maintaining the federal funds target rate range at 3.50% - 3.75%. The last time there were four dissents at an FOMC meeting was in October 1992. Resolute in his inclination to dissent, which he has done for six consecutive meetings, Fed Board Governor Stephen Miran would have preferred to lower the target range 25 basis points. The other three dissenting votes were cast by regional bank Federal Reserve Presidents Beth Hammack (Cleveland), Neel Kashkari (Minneapolis), and Lorie Logan (Dallas) who all “supported maintaining the target range for the federal funds rate but did not support inclusion of an easing bias in the statement at this time.” To reference an excerpt from the FOMC statement, “In considering the extent and timing of additional adjustments to the target range for the federal funds rate…”, it was the word “additional” which signaled a continued accommodative direction, considering the FOMC has only unequivocally lowered rates over the course of the past 20 months.
Earlier that same day, the Senate Banking Committee advanced the nomination of Kevin Warsh to be the next Chairman of the Board of Governors of the Federal Reserve. Moreover, it is widely expected that Warsh will receive full Senate confirmation prior to Powell’s chairmanship expiration on May 15. Although it is customary for a former Fed Chair to vacate his or her Board seat once a successor is confirmed, due to the DOJ’s investigation into Chairman Powell regarding cost overruns at Federal Reserve office buildings and perceived threats against Fed independence, Powell has indicated that he will remain on the Board of Governors for an indefinite period until the investigation is “well and truly over with transparency and finality.” Attesting to his integrity, Powell pledged not to be a “shadow chairman”, and vowed to respect the dominion and rank of Kevin Warsh in his post as Chairman.
U.S. Treasury yield curve saw considerably muted, single-digit movements compared to March as investors observed the conflict in the Middle East and its accompanying rhetoric, surveilled oil price fluctuations, and assessed an FOMC that remained on hold.
2-year/10-year spread: 50 basis points
3-month/10-year spread: 71 basis points
2-year/5-year spread: 13 basis points
3-month/30-year spread: 130 basis points
U.S. Treasury Yield Curve Source: Bloomberg
April 2026 Macroeconomic Highlights
Inflation, Expectations, and Consumer Sentiment1:
CPI: 3.3% year-over-year (+0.9% month-over-month); Core CPI: 2.6% year-over-year (+0.2% month-over-month)
PCE: 3.5% year-over-year (+0.7% month-over-month);Core PCE: 3.2% year-over-year (+0.3% month-over-month)
PPI: 4.0% year-over-year (+0.5% month-over-month); Core PPI: 3.8% year-over-year (+0.1% month-over-month) Core PPI less trade services: 3.6% year-over-year (+0.2% month-over-month)
Inflation Expectations: 1-year horizon: 3.4%, 3-year horizon: 3.1%, and 5-year horizon: 3.0%
Consumer Sentiment: 49.8 vs. 53.3 in March 2026; Current Conditions: 52.5 vs. 55.8 in March 2026
Consumer Expectations: 48.1 vs. 51.7 in March 2026
Labor Market2: The U.S. economy added +178,000 nonfarm payrolls in March, surmounting the +65,000 expected by economists surveyed by Bloomberg. Notable job gains occurred in health care (+76,000), construction (+26,000), transportation and warehousing (+21,000), and social assistance (+14,000).
U-3 official unemployment rate: 4.3% vs. 4.4% expectation: -0.1% from February 2026.
U-6 unemployment rate (marginalized, part-time workers for economic reasons): 8.0% (+0.1%).
Labor force participation rate: 61.9% (-0.1%); Employment-to-population ratio: 59.2% (-0.1%).
Average hourly earnings for private nonfarm payrolls rose 9 cents to $37.38 (+0.2% month-over-month, +3.5% year-over-year).
Revisions: February 2026 chopped -41,000 to -133,000; January 2026 lifted +34,000 to +160,000.
Gross Domestic Product (GDP)3: According to the advance (initial) estimate, real GDP increased at an annual rate of +2.0% in the first quarter of 2026 vs. +0.5% in the fourth quarter of 2025.
Consumption: +1.6%; GDP Price Index: +3.6%; PCE Price Index: +4.5%; Core PCE Price Index +4.3%.
Real final sales to private domestic purchasers: +2.5% vs. +1.8% in the fourth quarter of 2025.
Real disposable personal income: +1.5% vs. 0.0% in the fourth quarter of 2025.
Personal savings rate as a percentage of disposable income: 4.0% vs. 4.0% in the fourth quarter of 2025.
Housing Market4: Existing-home sales waned -3.6% (month-over-month) from February to a seasonally-adjusted annual rate of 3.98 million in March. Month-over-month sales receded in all four major regions.
Northeast: -8.5%, Midwest: -4.2%, South: -3.1%, and West: -1.3%.
Year-over-year sales slid -1.0%, down from 4.02 million in March 2025.
Total housing inventory registered 1.36 million units, +3.0% from February, and +2.3% from one year ago (1.33 million units). Unsold inventory sits at a 4.1-month supply at the current sales pace.
The median existing-home price for all housing types was $408,800, +1.4% from March 2025 ($403,100), as prices rose in the Northeast, Midwest, and South, but declined in the West.
Average commitment rate for a 30-year, conventional, fixed-rate mortgage: 6.38%.
New Home Sales: 635,000 (+8.9% month-over-month) – February 2026 reading.
1 Source: Bureau of Labor Statistics (BLS), U.S. Department of Commerce, Federal Reserve Bank of New York – Survey of Consumer Expectations, and University of Michigan Surveys of Consumers
2 Source: Bureau of Labor Statistics (BLS)
3 Source: Bureau of Economic Analysis (BEA)
4 Source: National Association of Realtors (NAR), U.S. Census Bureau, and The Department of Housing and Urban Development
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