The conversation about the Federal Reserve and the economy underwent a dramatic shift on Friday with the release of the all-important monthly jobs report. Traders and investors abruptly abandoned all skepticism as to whether the Fed will lower interest rates at its September meeting, The question now is not if, but by how much, and…
We always gave low odds that the Fed would cut rates at next week’s FOMC meeting, and the surprisingly vigorous GDP report for the second quarter only confirms that view. That said, the headline resilience revealed in the report obscures multiple storylines, some of which depict more vulnerability in the economy than suggested by the…
The debate over when the Federal Reserve should start cutting rates is continuing apace, with no clear resolution in sight over the near future. Unfortunately, incoming data is not providing much clarity. The case against cutting sooner rather than later is that the economy is doing just fine, thank you, under the current high-rate regime….
The Labor Department delivered a triple-crown winner on the inflation front this week, as a surprisingly benign CPI report boosted the fortunes of consumers, workers, and policy makers. Whether the Biden administration will reap the benefits is uncertain, depending on how long it takes for current good news to eclipse years of pain in the…
There will be no commentary over the July 4 holiday. The next weekly will be published on July 11. Once again, reports on the death of consumer spending are premature. After showing signs of fatigue in recent months consumers snapped back to life in May, overshadowing the soft retail sales report released last week. Since…
The soft-landing narrative is once again in the forefront, as most economic reports are coming in softer than expected and inflation continues to cool. Last week’s headlines featured the soft inflation data; this week the spotlight shone on the growth drivers consumers, jobs and housing. To be sure, not all sectors are fraying at the…
It’s been a while since the hard economic and inflation data delivered unequivocal good news for traders and investors. True, one might quibble as to whether a spike in applications for jobless benefits qualifies as “good news”. But for a Federal Reserve that has been on a long quest to tame inflation without causing a…
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…