Markets Bet on July Rate Hike After Fed Signals
Out: Forward guidance In: Task forces The new Fed chairman put his stamp on the *process* of the Fed, but the market cares about what the Fed will do. With little guidance from the chair, his broad commitment to deliver price stability and the committee's rate projections teeing up a rate hike later this year led markets to dial up bets on a July rate rise https://t.co/U9GrAKYNyK
Half of Fed Officials Forecast Multiple Rate Hikes
Very hawkish dot plot. Nine out of 18 officials have at least one hike this year (and six of those 9 have *multiple hikes*). Only one person has a cut this year, and one participant (presumably Warsh) didn't submit an...
Warsh’s Debut Could Tip Markets: Hawkish or Dovish?
Three things I'm watching at Kevin Warsh's first meeting It figures to be interesting because investors aren't sure what he believes when it comes to the broader economy and his framework for managing rates. Sound too hawkish, and he risks...
Fed Flips From Cuts to Hikes Under Trump‑picked Chair
The Fed has gone from debating how many times to cut rates to debating whether it has to hike. That alone makes today's meeting more interesting than usual. The twist: it's Kevin Warsh's first as chairman—and he was picked by...
VP Vance Targets 2.5% Inflation, Calls 3.5% Too High
VP Vance on inflation: "Right now it's at 3.5%. By the way, too high. We're doing everything that we can to bring it back down to 2.5%, which is where most people would like to see it."
Switchers' Wage Premium Vanishes as Growth Slows
The wage premium that had shown up recently for job switchers in the Atlanta Fed's wage growth tracker fizzled in the last two months. Wage growth decelerated to 3.5% in May (using the three-month moving average) from 3.9% in March....
May Core PCE Rises 0.4%, Widening CPI‑PCE Gap
Early estimates of the May PCE number (following the Thurs release of May PPI and the CPI on Wed) point to a firm core m/m reading that rounds up to 0.4%. Market-based core was milder. Portfolio management and airfares (which come...
Cleveland Fed's Median and Trimmed CPI Outpace Core
In May, the Cleveland Fed's median and trimmed mean CPI measures rose 0.30% and 0.26%, respectively (both higher than 0.21% for core CPI) On a 12-month basis, the median CPI was 2.85%, the same as core CPI. The trimmed mean was...
May Inflation Data Inconclusive, Fed Likely Holds
For the Fed, May’s inflation report settles nothing • Core was mild, but a soft monthly print buys less when it's drowned out by a hot headline and a "boomier" demand backdrop. The case for patience now needs a run of...
War Fuels Headline CPI Spike; Core Inflation Eases
May CPI estimates: Another hot headline print due to the war, but a milder core https://t.co/9ygRxNmfIy
Wage Growth Hits Near Post‑Pandemic Low, Payroll Index Steady
Wage growth over the 12 months ending in May was close to its lowest level in the post-pandemic period. The index of aggregate weekly payrolls for private-sector workers (which combines hiring, wages, and hours) was +4.3% for the year—near the...
BNP Paribas Predicts Fed Will Undo 2025 Rate Cuts
BNP Paribas: "We now expect the Fed to reverse 2025’s three 'insurance' rate cuts at sequential meetings, beginning in December."
May Adds 172k Jobs; Unemployment Steady at 4.3%
The U.S. economy added 172,000 jobs in May and the unemployment rate held at 4.3%. There were large upward revisions to March and April, raising the three- and six-month hiring averages to 188,000 and 92,000, respectively. https://t.co/DSgQfLC2sc
Don't Dismiss Outliers: Inflation Data Demands Vigilance
This *2021* Waller speech makes for interesting reading today. At the time, Fed doves had been pointing to trimmed mean measures of inflation to argue against overreacting to spot inflation. Waller's point was that serially excluding 'one-off' outliers assumes no new one-offs...
Bernanke Lauds Powell's Outreach, Warns of Transitory Inflation Misstep
Bernanke reflects on the Powell Fed at a Brookings event offering early retrospectives On the wins: -“A terrific job defending the Federal Reserve during a very, very difficult time” for Powell personally and for the institution. -Building up political capital with extensive outreach...