Does the Fed have the credibility not only to cut its policy rate next week but also to reduce it further in the following months, to the long-run neutral rate of 3% without stoking inflation? … READ MORE >
interest rates
Canada’s economy in sore need of an interest rate cut as job losses mount
Canada’s economy lost jobs in back-to-back months for the first time since 2021, pushing the odds of an interest rate cut this month significantly higher. … READ MORE >
Labor market loses steam as hiring rises by 22,000 in August
The slow hire, slow fire economy remained intact in August as the demand for new workers continued to sag, resulting in the creation of 22,000 jobs. … READ MORE >
Inflation’s persistence, the Fed and expansionary fiscal policy
With inflation well above the Federal Reserve’s 2% target and rising, and expansionary fiscal policies about to kick in, calls for rate cuts may be premature. … READ MORE >
Rising inflation, increased spending complicate Fed’s next decision
While nominal gains in spending and income look strong on the topline, adjusting for inflation is necessary—and subsequently implies an economy that is growing just above 1 percent. … READ MORE >
Powell opens door to September cut as Fed shifts to a balanced 2% target
Federal Reserve Chairman Jerome Powell on Friday gave investors and policymakers the words that they wanted to hear on a possible September rate cut. … READ MORE >
Wrong data at the right time: Mixed data complicates Fed’s decision
A lot is happening in the economy, but one trend has become clear: The economy is slowing but not enough to guarantee a rate cut. … READ MORE >
In the July CPI, the temperature is rising in the core
The U.S. consumer price index in July saw a meaningful increase, driven by sticky service sector pricing and tariff-induced price increases, which are all over the report. … READ MORE >
Market Minute: What’s keeping interest rates so high? The risk premium.
The market appears to be pricing in the possibility of additional rate hikes should inflation continue to increase as tariffs are implemented. … READ MORE >
The big chill hits the labor market as job creation cools in July
Job creation in July slowed to 73,000 in July on the back of a large downward revision of 258,000 in May and June, capturing a big chill spreading out over the domestic economy and labor market. In addition, the unemployment rate rose to 4.2%, but that increase was partially masked … … READ MORE >