Friday’s robust monthly employment report silenced a nascent whisper campaign that a July rate cut by the Fed was on the table. That notion was spurred by a string of incoming data revealing a softening job market, cooling inflation, and signs of slower growth in the broader economy, underpinned by a pullback in consumer spending….
The latest spate of Fed speakers did little to squelch market concerns that interest rates would be held at elevated levels for the foreseeable future. Indeed, market sentiment of late is that the long-awaited cuts will be pushed back even further than thought a few weeks ago. Stubborn inflation amid a still muscular- though modestly…
The good news is bad news narrative roiled the financial markets this week. It’s no secret that traders are looking for signs that the economy is cooling off, taking the heat off inflation and providing the Fed with the necessary incentive to start cutting interest rates. While the ingredients for this scenario fell into place…
Three steps back, one step forward for disinflation. That’s clearly too much of a bumpy ride which, if sustained, would not lead to the Fed’s 2 percent destination. That said, a case can be made that an array of flukes skewed the hot inflation data over the first three months of the year whereas the…
The data-dependent Federal Reserve had little of substance to digest this week, as the economic calendar was very light. It will be another week or two before the next round of key data either nourishes or dilutes the budding narrative of a slowing economy instigated by the April jobs report. We suspect that support for…
April’s employment report is about as good as it gets. Moderating job growth, looser labor market conditions and slower wage gains, just what the Fed doctor ordered to tame inflation. What’s more, there were few if any devils in the details. The unemployment rate did tick up to 3.9 percent from 3.8 percent in March,…
The higher for longer narrative received more confirmation this week as key economic reports signaled an economy that continues to chug along and an inflation rate that stubbornly remains well above the Fed’s 2 percent target. Yet, the news could have been worse. At first blush, the headline GDP suggested that the economy’s growth engine…
The notable baseball philosopher, Yogi Berra, purportedly said that’s making predictions is hard “especially about the future”. Federal Reserve officials, as well as investors, are learning that lesson the hard way. This week alone, a procession of policymakers admitted that they made a mistake about their inflation predictions, acknowledging more forcefully again that price increases…
The inflation dragon reared its head again, unsettling the financial markets and upending expectations of when, or even if, the Fed will lower interest rates this year. Clearly, Fed officials were not happy with the March consumer price report released on Wednesday, which came in hotter than expected for the third month in a row…
They did it again. In what’s become a distressingly common occurrence, the Labor Departmentrevealed another upside surprise on the jobs front, revealing that the economy created an eyeopening 303 thousand net new jobs in March, far above the consensus forecast of roundly a 200thousand gain. True, revised figures cut 5 thousand jobs from the previous…