Diane Swonk
Chief economist and prominent U.S. macro voice. Posts on employment, inflation, monetary policy, and growth/inflation outlooks.
Warsh’s Hawkish Tone Signals No Immediate Rate Cuts
Hawks flock at Fed. New Fed Chair Kevin Warsh scored a win with a shorter statement, which ended with the Fed’s commitment to restore price stability. He said only one person discussed a cut and even though he did not want to commit to a policy move, the hawkish shift on the
May PCE Climbs to 4
🔥producer prices came in hot, again in May. Together with the CPI, the imply an increase in the PCE of 0.5% on total and 0.3% on core. That would boost the PCE to an annual increase of 4.2% in May,...
Sticky Inflation Forces Fed Hike, Eroding Savings to 2008
Fed’s inflation target came in hot & sticky in April, fueling Fed’s pivot to a rate hike instead of a cut. High inflation & loss of transfers for Medicaid and SNAP (food stamps) sapped income growth & drained saving to...
Fed Faces Stubborn Inflation Amid Iran Conflict
The Fed in hot seat The war in Iran is adding fuel to an already well-kindled fire. Inflation has persisted for five years, with its effects compounding over time. Those shifts create a hard backdrop for new supply shocks tied to...
PCE Inflation Set to Hit 3.7%—Hottest Since 2023
🔥A post mortem on the inflation data this week and what it means for the Fed ‘s target PCE measure. The energy prices are hot and to be expected. The components of CPI, PPI and import prices that feed directly...
April CPI Spikes, Wages Lag Low‑income, Affluent Spend
CPI rose 0.6% in April after a 0.9% increase in March, the fastest two-month gain since May and June of 2022. The index surged 3.8% from a yr ago, 0.2% above wage gains for the month & the hottest pace...
Fed's Rate Cuts Aim to Balance Jobs and Inflation
Monetary policy is a blunt, highly imperfect tool. The Federal Reserve, unique in having a dual mandate of promoting price stability & full employment. When both of its mandates are out of whack, it has to assess which is more...
Payroll Gains Mask Small Business Strain and Hidden Unemployment
Payrolls surprise to the upside but should be taken with a grain of salt. The household survey has shed jobs since the start of the year. Payrolls are revised and often miss the real-time stress felt by small &...
Narrow Wall Street Rally Masks Deepening Energy Scarcity
Wall Street rebound driven by smallest number of stocks on record via Financial Times. Narrow gains are not good. My friends who are closest to the energy markets are completely flummoxed by the drop in futures prices for WTI and...
Middle East Conflict Sparks Unbuffered Global Supply Chain Shock
Coming up on CNN International to talk the conflict in the Middle East and ripple effects for the US and global economy. The shock is more than an oil shock, which is painful in its own right; it is...
Global Economy Faces Pandemic‑Level Shock Without Safety Nets
Been abroad in meetings. There was an undercurrent to them this year. (More of a riptide) Collecting my thoughts on what I can share. Still processing & recovering from the exhaustion of the changes we are enduring. They are global in...
Fed Holds Rates, Dissenting Hawk Calls for Cut
Hawks squawk amidst “assaults” The Federal Reserve stayed on the sidelines with rates held in the 3.5to 3.75% range. The statement underscored the uncertainty regarding “developments in the Middle East.” The vote was not unanimous in a very unique way. Governor...
Fed Stuck Between Rate Hike and Cut Amid Global Strain
Debate within the Fed about whether its next move is up or down intensifying. Fed is in an uncomfortabke holding pattern on rates. Its inflation-fighting credibiity is eroding. War distributions creating COVID like supply chain problems - emerging Asia hit...
Inflation Outlook and Fed Path Discussed on CNBC
Coming up on CNBC with Kelly Evans & Steve Liesman to talk inflation and the road forward with the Federal Reserve.
Economic Trends Echo Past Cycles, Not Exact Repeats
Took my inspiration from Jackson Browne’s 1977 hit Running on Empty. History doesn’t repeat, but often rhymes. https://kpmg.com/us/en/articles/2026/april-2026-economic-compass.html