With the Feds aggressive half-point rate cut this week, the direction of travel has been set in motion, and a speed limit dialed into the dashboard. To be sure, monetary policy is not on cruise control; depending on road conditions, the speed limit can be adjusted faster or slower. For now, Fed officials expect to…
The debate over whether the Fed will cut rates by 25 or 50 basis points at next weeks FOMC meeting is still unsettled, but the odds for the smaller cut have increased following a stronger-than-expected inflation report this week and, to a lesser extent, further evidence that the labor market is holding up. For sure,…
Amid this summers sweltering heat, a cooling trend is wafting through the labor market. The chilling effect is just what the Fed ordered as long as it doesn’t result in a freeze. As Fed Chair Powell noted in a recent speech, we don’t seek or welcome a further cooling in labor market conditions. The August…
The weekly will not be published over the Labor Day weekend. The next issue will be September 6, the day the August employment report is released. While this week featured a light calendar of economic data, it was not without attention-grabbing news on the political and economic fronts. Unsurprisingly, Kamala Harris’s acceptance speech at the…
The Federal Reserve is a deliberative body that does not have the audacity to declare “mission accomplished” in its quest to achieve a soft landing. But it can justifiably savor the sweet spot the economy has clearly entered early this summer. Growth is holding up, the job market remains resilient and, importantly, inflation is steadily…
First impressions are never a good look in economics. Not only do they often mislead investors, but they can also spur misguided efforts to influence policy. That notion was on full display the past two weeks, reflecting the markets dramatic knee-jerk reaction to a surprisingly weak jobs report last week that subsequent data suggest may…
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…