Baker Market Update 2026-04-24

Happy Friday everyone! Here in Oklahoma City the town is buzzing. Whether it is the start of the NBA playoffs, where the OKC Thunder hold a 2-0 lead against the Phoenix Suns, or the Oklahoma City Memorial Marathon, people are out and about making the town feel alive. In contrast, the world of economic data was a little more on the sleepy side this week.

Earlier this morning, Friday, April 24th, ABC News reported that the Department of Justice is dropping its criminal probe into Federal Reserve Chair Jerome Powell. It is a meaningful headline, and one worth pausing on, because Powell wears two of the most consequential hats in American finance. Beyond chairing the Federal Reserve, he also leads the Federal Open Market Committee, the group that ultimately sets the direction of U.S. monetary policy. This announcement comes as the Fed is in the middle of a leadership transition, with Kevin Warsh lined up to replace Powell at the helm of the central bank, and the legal battle had been slowing down the confirmation process. In a post on X, Jeanine Pirro, the U.S. Attorney for the District of Columbia, said her office is closing its investigation into the alleged cost overruns on the Fed's new building project. Instead of a criminal probe, the Fed's own Inspector General has been tasked with digging into how the project was handled and putting together a full report. Markets responded quickly to the headline, with Treasury yields rallying across the curve. The 2-year fell 5 basis points and the 10-year moved 3 basis points lower.

One of the more notable data points we received this week was also released this morning, with the University of Michigan's Consumer Sentiment survey. In April, consumer sentiment saw a slight decline relative to March's reading. According to the report, the headline index dropped from 53.3 in March to 49.8 in April's final reading, marking the lowest level on record going all the way back to 1978, which is when the survey began publishing reports on a monthly basis. The two largest contributing factors to the decline were the changes in the one-year and five-year economic outlooks. Sentiment regarding the outlook for the economy over the next 12 months deteriorated by roughly 13.63%, while the five-year outlook weakened by approximately 4.5%. Based on the underlying components, much of the uncertainty weighing on consumers appears to stem from ongoing geopolitical concerns, including the war in Iran, as well as softness in the labor market, where the "low fire, low hire" dynamic remains in effect.

Have a great weekend everyone!