This Week in Review | US Inflation, US-China Visit, Fed Chair Confirmation (May 15, 2026)
Fisher Investments' weekly review covers three major developments: April US inflation rising to 3.8% year-over-year, President Trump's summit with Chinese President Xi Jinping in Beijing, and the US Senate's confirmation of Kevin Warsh as the next Federal Reserve chair. The segment argues that inflation fears are overblown, US-China dialogue reduces uncertainty, and Fed chair transitions have less market impact than headlines suggest. Overall, the outlook remains bullish for stocks.
Summary
The episode opens with a discussion of April US inflation data released by the Bureau of Labor Statistics. Headline CPI rose to 3.8% year-over-year, the highest reading since May 2023 and above consensus forecasts, while core inflation (excluding food and energy) rose to 2.8% from 2.6% in March. Despite public concern about another wave of runaway inflation, Fisher Investments argues the conditions for sustained high inflation are not present. They contrast the current environment with 2022, when inflation was compounded by a massive Covid-era surge in money supply — in some cases 30% year-over-year — which is absent today. The firm views inflation fears as part of a 'Wall of Worry' that stocks tend to climb, and sees room for economic reality to outperform investor expectations, which they consider bullish for equities.
The second segment covers President Trump's visit to Beijing for a summit with Chinese President Xi Jinping. Topics discussed included tariffs, rare earth metals, AI, semiconductors, Taiwan, and the Middle East conflict. Fisher Investments emphasizes that despite intense political rhetoric, the US and China remain deeply economically interconnected, and that interdependence creates incentives for cooperation. The firm cautions investors against making short-term, reactionary decisions based on headlines, noting that meaningful political negotiations take time. They view ongoing dialogue between the world's two largest economies as a net positive that should reduce uncertainty over time.
The final segment addresses the Senate's confirmation of Kevin Warsh as the next Federal Reserve chair, replacing Jerome Powell. The Senate voted 54 to 45 to elevate Warsh, finalizing a process that began nearly a year prior. Fisher Investments downplays the significance of the leadership change, arguing that monetary policy is set collectively by the 12-member Federal Open Market Committee rather than driven by any single individual. They also note that new Fed chairs often act differently in office than their congressional testimony suggests. The firm believes media focus on the Fed chair transition and speculation over interest rates obscures broader economic positives, and that healthy fundamentals should continue to drive the bull market forward.
Key Insights
- Fisher Investments argues that the current inflation environment lacks the key ingredient that made 2022 dangerous — a prior surge in money supply during Covid lockdowns, when central banks raised broad money supply by as much as 30% year-over-year — making a repeat of that inflationary episode unlikely.
- Fisher Investments frames rising inflation fears as part of the 'Wall of Worry' that stocks historically tend to climb, and believes market-based indicators suggest inflation will remain contained despite the April CPI reading coming in above forecasts.
- Fisher Investments contends that the deep economic interdependence between the US and China creates structural incentives for cooperation even amid geopolitical tensions, and that ongoing diplomatic dialogue between the two largest economies likely reduces uncertainty over time.
- Fisher Investments argues that the Fed chair role is far less market-impactful than media coverage implies, because monetary policy is set collectively by the 12-member Federal Open Market Committee, not by a single individual.
- Fisher Investments points out that history shows new Fed chairs' actual policy actions often differ significantly from the positions they articulated during their congressional nomination process, cautioning investors to 'watch what they do, not what they say.'
Topics
Transcript
[0:05] Hello and welcome to This Week in Review. This is a weekly segment designed to highlight a few important developments you may have missed this week. We'll talk about what they mean for markets and most importantly, the potential impact for investors. To stay up-to-date with all of our latest market insights, subscribe to our YouTube channel or visit FisherInvestments.com. Now, let's review what happened this week. First, an update on April US inflation. On Tuesday, the Bureau of Labor Statistics released the latest [0:36] US Consumer Price Index data. The report showed headline inflation rose to 3.8% year-over-year in April. This reading was both above consensus forecasts and the highest rating since May of 2023. Core inflation, which…
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