Manufacturing Expands for First Time in Over a Year, Complicating FedInflation Fight

• American manufacturers expanded in March for the first time in 16 months according to the Institute for Supply Management, indicating economic recovery.

• However, a resurgence in manufacturing could complicate the Federal Reserve's inflation fight by delaying interest rate cuts or resulting in fewer cuts this year.

• President Biden has signed spending packages allowing manufacturers to invest in new factories and ramp up production.

• Multiple Fed officials said persistent economic strength allows them to remain patient on interest rates until inflation clearly heads to 2% goal.

• ISM’s latest data added evidence the economy remains robust, keeping the Fed on hold as it continues monitoring incoming data.