GM. This is Milk Road Macro, the newsletter that knows that the market has not yet fully priced in Kevin Warsh’s meme potential.

Here’s what we’ve got for you today:

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ALL WARSHED UP

Fed Chair nominee Kevin Warsh, seen here trying to make money cool again, is having his confirmation hearings in the U.S. Senate.

This comes as the Fed’s latest Beige Book highlighted “skyrocketing” fuel and input costs tied directly to the Iran conflict, and March CPI already showed the oil-driven inflation pop.

Markets are watching for any signals on rate policy independence vs. political pressure. They’re going to be hanging on his every word and looking for signs of how he’s going to lead the Fed as Chairman.

The Fed’s reaction function is the single biggest driver of asset prices right now.

A hawkish chair could keep rates higher for longer. A dovish tone would support risk assets.

Trump wants Warsh to cut rates.

We’ll let you know how things go.

U.S. MARCH RETAIL SALES SHOW CONSUMER RESILIENCE

Meanwhile, U.S. retail and food services sales jumped +1.7% MoM (well above the +1.4% consensus and the strongest since March 2025), with retail trade up +1.9%.

The surge: Led by a record +15.5% jump in gasoline stations amid the Iran conflict-driven fuel price spike.

Broader categories like furniture (+2.2%), nonstore retailers (+10.1% YoY), and most others showed solid gains, helped by larger tax refunds.

Why this matters for investors?

Consumer spending is ~70% of U.S. GDP.

This data shows households are still spending despite higher gas prices and record-low sentiment.

However, the gas-station boost is temporary and inflationary, which could complicate the Fed’s path. Stronger consumption is generally bullish for equities, but it reduces the odds of near-term rate cuts.

Wrapping up

Bottom line for investors today: The retail sales beat is a short-term positive for growth and risk assets, but it’s still being threatened by the geopolitics/Fed overlay. 

Markets are up, but they’re also in a “wait-and-see” mode on Iran talks and Warsh’s testimony.

The markets are still celebrating de-escalation in conflict, but underlying risks (high valuations, sticky inflation from energy, weak sentiment, and lingering geopolitical uncertainty) remain on the horizon.

The week’s earnings and PMI data will likely set the tone heading into the rest of April.

All told, things are looking positive on the macro front for the moment. This year has been defined by volatility and uncertainty. Things can and probably will continue to change fast.

Stay safe. Stay educated. And stay Bullish!

BITE-SIZED COOKIES FOR THE ROAD 🍪

The IMF slashed its 2026 global growth forecast to 3.1% and lifted headline inflation projections to 4.4%, citing persistent energy-price shocks from the Middle East conflict.

UK average weekly earnings growth cooled to 3.8% YoY in February while claimant-count unemployment rose more than expected, signaling a clear softening in the British labor market.

S&P Global cut its 2026 world real GDP growth forecast by half a percentage point to just 2.4%, which is the weakest pace outside of recessions in more than a decade. They cited weaker demand and higher inflation from the oil shock.

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