The first week of May proved to be action-packed: another bank failed and was acquired out of receivership, the Federal Reserve met and raised interest rates, earnings continued to roll in, equity markets experienced renewed volatility after a lull, and economic data continued to be resilient “in spite of it all”.

Congress’s gridlock and battling is a lot like two bucks fighting. Most of the time the party disputes carry manageable market risks, but occasionally this gridlock has the potential to wreak havoc on the U.S. economy and financial markets.

Don’t fight the Fed. Fighting the flow of Fed-related liquidity is like trying to swim against a powerful river current: you can swim as hard as you can, but you will make little forward progress if the flow of the current is working against your efforts.

The return of Bruce Springsteen to New York City last weekend reminded us of his 1978 song “Prove it All Night”, which he has said conveys the message “success requires sacrifice”. This is a fitting analogy for the coming U.S. corporate earnings season, which kicks into gear next week with some of the largest index constituents and economic bellwethers reporting first quarter results on April 14th.