Inflation Momentum Fades, but Regime Remains Elevated Rate hike probabilities for September have fallen alongside softer spot data. The two low inflation prints in particular take some of the sting
Accomodation Everywhere The most recent inflation data has arrested the hawkish drift of participants evident at the July FOMC meeting, at least for now. Although, or perhaps because, the Fed
Monday Morning Notes, 8/17/26 If You Don’t Have Time This Morning While Fed speakers increasingly see that inflation exceeding target for going on six years is becoming embedded above target,
Hawks Sidelined While we think underlying inflation remains in a range closer to 3% than 2%, the soft July inflation data has likely sidelined Fed hawks and contributed to the
Gray Zone While market participants will need to wait for tomorrow’s PPI report for a more complete picture of inflation, today’s CPI report suggests that inflation remains stuck in the
Monday Morning Notes, 8/10/26 If You Don’t Have Time This Morning The July employment report is broadly consistent with a low breakeven rate labor market operating near full employment. While
Inflation, Supply Shocks and Accelerated Pass-Through Our view remains that the US economy has settled into an above-target inflation regime. It is possible that the Fed’s long-held, bottom-up view of inflation
Monday Morning Notes, 8/3/26 If You Don’t Have Time This Morning Fed Chair Kevin Warsh’s press conference has sparked a conversation about the Fed’s ability to maintain credibility, but we
All Hat, No Cattle In a 9-3 decision, the FOMC marked the occasion of the 63rd month (and counting) of above-target inflation by holding rates steady. Our lean on regime change came
Monday Morning Notes, 7/26/26 The Fed has been moving toward a rate hike all year. In our view, it’s been inevitable, it’s only an issue of timing. Inflation is too high
Monday Morning Notes, 7/20/26 If You Don’t Have Time This Morning We have a shorter note this morning given that the die appears to be cast for the upcoming FOMC
Ahead of the Weekend: July is Dead This week’s inflation data put an end to the debate over July and shifted the discussion to the question of a September rate
Hawkish Waller Opens the Door to July A hawkish Fed Governor Chris Waller opened the door to a July rate hike, but the CPI data might close that tomorrow. In the
Monday Morning Notes, 7/13/26 If You Don’t Have Time This Morning We continue to circle around the same space. Missing on only one side of its mandate, the Fed is
Thoughts for the Weekend: Don’t Expect Price Stability Anytime Soon Whether or not a Warsh Fed hikes rates in July or September, we don’t expect to see price stability anytime
Odds and Ends: Hassett, Bowman A couple of things that slipped below the radar in the last couple of weeks. First, White House NEC Director Kevin Hassett’s recents comments appear to be
Momentum For Hikes Building Yesterday, Fed Governor Chris Waller shifted hawkish again with comments that open the door to rate hikes. Speaking in Rome, Waller acknowledged that the risks to the
Monday Morning Notes, 7/6/26 If You Don’t Have Time This Morning While new Fed Chair Kevin Warsh has adopted our language and says the Fed has “recommitted to price stability,”
Labor Market Strengthens Further One pillar of the Federal Reserve’s benign view of persistent, above-target inflation is that the labor market is not currently a source of inflationary pressure. However, if
Upcoming PCE Methodology Changes Last week, in a preview of this fall’s annual update, the Bureau of Economic Analysis (BEA) noted they will be changing the deflator for three categories:
