Data. Who needs it?

Not America’s data-dependent monetary authority, that’s for sure. Just ask this month’s inexplicable rate cut and the one markets are convinced is coming next month.

“In light of October’s relatively benign inflation update and the market’s willingness to price in >80% odds of a 25bps cut next month, we’re content in the knowledge that the next relevant data input for [Jerome] Powell will be the November data set,” BMO’s Ian Lyngen and Vail Hartman said Thursday, adding that while it’s possible an upside surprise from that set of numbers (i.e., the top-tier macro releases covering this month’s economic activity) could “give the market reason to ponder the Fed leaving rates on hold [in December], we’re operating under the assumption that Santa Pause has left the building.”

I don’t disagree. But I’d quibble with the notion that the Fed’s “purely” data-dependent, as officials variously suggest. If they were, it’s not obvious where the cutting bias is coming from. The October jobs report was a throwaway release — it was distorted, hopelessly, by the impact of two hurricanes, so you can’t cite that. I take Lyngen’s point about this week’s CPI release being “relatively benign,” but the key word there’s “relatively.” Core CPI in the US is still running warm.

On Thursday, producer prices came in largely as expected. The headline final demand gauge rose 0.2% last month from September. The core print was a little warm, though, at 0.3% (0.25364% unrounded) and 3.1% YoY.

See the subheader on that chart? “US PPI report mixed following warm CPI read.” It said exactly the same thing in last month’s PPI update. What does that tell you about inflation progress in America? (Lack thereof. That’s what it tells you.)

This release will impart a small upward bias to PCE prices due later this month, but let’s not kid ourselves: The Fed doesn’t care at this point. Will they slow the pace of rate cuts going forward if the disinflation progress stops entirely? Sure. Are they going to fight tooth and nail for that “last mile” down to 2% inflation if it means risking a succession of negative NFP prints at the beginning of Trump’s second term? Hell no. (“3% is 2% if you subtract 1%. Mission accomplished!”)

As for jobless claims, guess what? They were low. Again. Thursday’s print (covering the week to November 9) was 217,000, below estimates.

That big jump at the beginning of October’s out of the four-week rolling lookback now, so the moving average dropped to 221,000, the lowest since May.

Add it all up — i.e., warm core price growth and rock-bottom jobless claims — and what do you get? Rate cuts, of course! Or else.

“Or else” what? you might ask. Let’s go the 2019 highlight reel, shall we:

No guts, no glory. Wait, sorry. No “guts,” no glory, because we’re all going to have to get used to superfluous, misplaced scare quotes again.

“Wait a minute, Doc. Are you telling me you built a time machine out of a DeLorean?”