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This Was Not A Good Inflation Report
"US CPI data will likely show further disinflation in September," read the headline on one mainstrea
Agree 100%. Had Powell’s press conference comments followed H’s suggestions re: post-Sept rate cuts in 2025, the water would be room temp. And Powell would like much wiser and less politically motivated (whether the latter insinuation is deserved or not).
Looks like the risks are balanced. 50 clearly not warranted. 25 cut probably is. If they go 25 in November they may have to pause in December and that’s ok. Real rates are still too high. Cyclical sectors such as cap spending in interest sensitive areas, residential construction and the like are still weak. So go ahead Larry Summers, tell us why the FOMC are way off and you are so right….
There’s no data-based case for a cut in November. None. That could change between now and then, but you’re in denial. ISM services? Hot. NFP headline: Hot. NFP revisions: Up. Household survey: Hot. Jobless rate: 4.1% (LOOOWWWWWW). Saving rate: Revised 2 full percentage points higher. GDP/GDI average: 3.2%. Core CPI: Warm. Core services ex-shelter: Hot. Stocks: Record. IG credit spreads: <100bps. And the Fed was dead-ass wrong on inflation. Summers was absolutely right. Right for the wrong reasons? Maybe. But I’d rather be right for the wrong reasons than wrong for the right ones.
Seems like ‘bifurcated economy’ is another way of saying stagflation