Diane Swonk
Chief economist and prominent U.S. macro voice. Posts on employment, inflation, monetary policy, and growth/inflation outlooks.
Consumer Sentiment Hits Dec‑2025 Low Amid Gas, Market Turmoil
Surveys of Consumers Director Joanne Hsu ”Consumer sentiment fell back 6% this month to its lowest level since December 2025. Declines were seen across age and political party. Consumers with middle and higher incomes and stock wealth, buffeted by both escalating gas prices and volatile financial markets in the wake of the Iran conflict, exhibited particularly large drops in sentiment.
WFH Increases Productivity and Supports Reproduction
Nick Bloom and Steve Davis and your amazing colleagues - thank you for your research on WFH and humane shifts in work schedules that revealed the benefits of such shifts. Here is a new paper I have been following the...
FOMC's Dovish Pause Masks Hawkish Stagflation Risks
Participants at the FOMC meeting rounded the wagons around Powell at a difficult moment for Fed independence. What looked like a dovish pause on the surface had hawkish undertones. Risks to meeting participants forecasts were to the downside on growth,...
Fed Leadership Split Complicates Inflation and Labor Outlook
My take on the difficultly navigating the splintering within Fed leadership amidst tension of inflation and the labor market.
Full Employment Requires Taming Inflation, Not Rate Cuts
My full write up on inflation. Important to remember that we can not sustain or obtain full employment unless inflation is detailed. For those arguing the #FOMC should cut to shore up employment and ease inequality. Cuts in late 2024...
CPI Understates Inflation; Core Services Surge, Fed Faces More Pressure
More to come but things to keep in mind… CPI headline figures of 2.4% are artificially suppressed by the lapse in data collection during the six week government shutdown. Under the hood, there is a disturbing acceleration in core service sector...
Oil Prices Mirror Chaos Theory's Butterfly Effect
My monthly takes a look at oil price scenarios Inspired by Jurassic Park and Jeff Goldblum’s explaination of chaos theory. This hit close to home. Made my mom cry - should have warned her about the ending. The Butterfly Effect...
Opaque Private Debt Markets Reveal Growing Financial Fragility
Private debt markets have been struggling for some time. These are nonbank lenders, largely in the private equity space, although they do rely upon bank credit. This is one of many fragilities in the financial market and the economy more...
Producer Prices Surge, Profit Margins Hit Record Highs
🔥 My colleague Meagan Martin-Schoenberger has updated the producer price index data released today. The index showed the largest increase in core goods (wx food and energy) prices since early 2022; profit margins soared to their highest on record, with...
Goolsbee Flags Stubborn Core Service Inflation, Questions AI Growth Boost
#NABE2026 Chicago Fed Pres Austan Goolsbee third day of policy meeting. More worried about the risks to inflation, especially the persistence of core service sector inflation, which shouldn’t be affected by tariffs. This is after stripping out shelter costs....
AI May Cut Taxable Income, Complicate Deficit Outlook
#NABE2026 AI and the federal deficits - Wendy Eldeberg formerly of CBO and now Brookings notes that AI could diminish taxable incomes? Reality nuanced due to taxes on workers could diminish. 🤯 AI boom could create a painful labor market...
North Dakota Beats Venezuela; Venezuelan Oil Too Costly
#NABE2026 Dan Yergin Vice Chairman of S&P500 expert on energy market. N Dakota produces more oil than Venezuela. We have to question reserves in VZ - over half requires $70-$80 per barrel to produce. Too expensive. Skeptical about how...
Neutral Rate Near 3% as Forecast‑Based Policy Debate Rises
Need to know where we are relative forecast-based policy setting. Neutral rate est at what it was a little less than 3%. The push to make policy on forecasts is something the administration’s nominee to replace Chair Powell has argued....
Walller Signals Potential Rate‑Cut Pause Amid Improving Data
Potential pivot by @federalreserve Gov Chris Walller - IF the next retail sales & labor data continue to show signs of further improvement, like we saw in Jan, then would support a pause in rate cuts after dissenting in Jan....
Admin Raises Section 122 Tariff
New tariffs levied - twice in less than 24 hours. Now Section 122 used to levy 15% across the board instead of 10%. That gets the effective tariff rate closer to what it was before the ruling by the Supreme...
Supreme
Here is my write up of all the data and the Supreme Court ruling on tariff legality. https://kpmg.com/us/en/articles/2026/december-2025-pce-and-gdp.html
Jobless Boom Creates a Fire‑and‑ice Economy Despite Slowing Growth
My write up coming soon of GDP, inflation, employment and the Supreme court ruling IEEPA tariffs illegal. Curb your enthusiasm. Refunds are not guaranteed & the logistics to quote the Court are a “mess.” Moreover, the admiration has other levers to...
Data Centers Drive Growth as Fed Shows Internal Split
Today’s burst of economic data showed an economy still powered by the boom in data centers with some broader increases in vehicle orders (Dec) and production (Jan). Housing starts popped in December and were revised higher for November. Good...
CPI Cool, but Data Gaps Mask True Inflation
The CPI data came in cooler than expected, which is always welcome. The headline is obscuring some of the underlying inflation due to the loss in data associated with the government shutdown. The overall index posted its coolest reading since...
Labor Market Rebounds After Shutdown, Easing Temporary Layoffs
The labor market showed signs of healing late in 2025 and in January. Catch up following long government shutdown helps alleviate ranks of those suffering temporary layoffs and forced to accept part instead of full-time jobs. Some healthy churn returned...