Weekly Update: Energy Shock Supports Case for Getting to Neutral—Not...
The outlook just keeps getting more uncertain. Powell came to his first monetary policy testimony of the year last week with a plan to deliver a message, which he laid out very clearly early in the...
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Weekly Update: May Edition of the 50-or-25 Debate Kicks Off
As we wrote last week, despite there being some significant surprises in the March SEP, we still felt comfortable with our call of seven 25-basis-point hikes this year. We adjusted our call only...
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Fed Balance Sheet Watch: Project Runoff
Situation. Powell previewed the reduction of the balance sheet with passive runoff, using caps that phase in. But it is unclear if the FOMC will be able to shrink it in time. A downturn that...
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Inflation Monitor: February PCE
Today’s personal income and outlays report confirmed that inflation remained very high in February, of course. Core PCE prices increased 0.35% in February, which corresponds to an annualized rate of...
View ArticleFOMC Briefing: Diminishing Returns to Hawkish Holds
The “hawkishness” of successive hawkish holds is subject to diminishing returns. But we see virtually no chance of a September hike. That’s the overwhelming consensus on the FOMC and all will agree,...
View ArticleMeyer’s Musings: It’s All About Supply!
I have been writing, indeed many times, about the challenge of allocating responsibility for the sharp and persistent increase in inflation to supply- and demand-driven forces. Their relative roles...
View ArticleThoughts on BEA’s Monthly Data through August
Yesterday BEA released revised quarterly NIPA data through Q2, with the 2023 comprehensive update of the national economic accounts affecting the data through Q1. Today BEA released the monthly data...
View ArticlePolicy Prism: Currency of Choice
As war in Europe continues, some U.S. competitors have ramped up rhetoric about alternative currency regimes that do not center around the dollar. New data continue to pour cold water on this hope. We...
View ArticleRecent Financial Tightening (and Inflation Data to Come) Outweighs Strong...
We are adjusting our call. This was a strong jobs report, and it makes clear that there’s more work to be done. However, the tightening in financial conditions we’ve seen—before and after this...
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