ECONOMIC WEEK AHEAD: April 20-24

The week starts with the Strait of Hormuz still the key risk for financial markets. Today, Iranian state media said the Strait has been closed again because the US “did not fulfill their obligations.” Iran had declared it was open on Friday. A renewed US diplomatic push could send senior officials back to talks as early as Monday, but no date has been finalized, and the situation remains fluid. In the US, the average pump price remained above $4.00 during the week of April 13 (chart).

Adding to the week’s suspense, the probable next chief of the Federal Reserve, Kevin Warsh, testifies before the Senate at his confirmation hearing on Wednesday. The markets will be listening to how he views the Fed’s independence, the Fed's dual mandate, and the Fed's sequencing of rate decisions given the current economic backdrop.