The labor market has slowed significantly due to near-zero population growth caused by halted immigration and low fertility. Producing 29,000 jobs monthly aligns with the reduced population growth, so the economy might be in balance despite the low job numbers. The Fed appears likely to cut rates, but that might be a policy mistake since the low job growth doesn't necessarily signal weakness that needs fixing via rate cuts.

Markets are rallying broadly: stocks at all-time highs, gold at all-time highs, bonds rallying, crypto rising. The market sentiment is bullish with a strong passive investing bid. However, inflation remains a concern due to tariffs rising six-fold and labor market power shifts from remote work, which could keep inflation elevated.

I fear the Fed making a mistake by cutting rates to stimulate an economy that doesn't need it. That could create inflation and market backlash. The Fed is risking to repeat last year's scenario when rate cuts led to higher long-term yields.

Inflation will remain an issue driven by tariffs and wage pressures due to remote work dynamics empowering labor. I expect core CPI to rise from 3.1% towards 3.5-4% in coming months. Although housing rents might ease inflation, other factors will more than offset that.

Gold is rallying sharply, reaching record highs propelled by these inflation fears and monetary uncertainty.

Regarding the dollar, it is relatively weak compared to other asset classes right now.