Stay-At-Home Macro

Today’s post is an excerpt of a talk I gave last week at the Forecasters Club of New York.

The White House’s ‘move fast and break things’ attack on the Fed hit a roadblock yesterday: the Supreme Court.

Fed Chair Powell has warned that there are “no risk-free paths now.” He’s referring to the challenging situation for the Fed with the risk of inflation persistently above target and the risk of employment weakening.

Fed independence is a question of power.

The main event of the week in economic policy may sound bland: “Economic Outlook and Framework Review.” However, Fed Chair Powell’s speech on Friday at Jackson Hole will be anything but bland.

After an avalanche of data last week, there are more signs of a slowing economy.

Two foundational protections of the Fed’s independence in monetary policy are under threat: the tenure of Fed officials and the control of its budget.

The summer months should bring more clarity on how President Trump’s economic policies are affecting the economy.

I have corrected my discussion of PPI trade services in my post last week.

[Updated on June 21 to correct my discussion of PPI trade service margins.

It’s Jobs Week.

The Fed will remain on hold today, keeping the federal funds rate in the range of 4.25% to 4.5%.

With recession odds rising and the stock market down, it is no surprise that President Trump thinks the Fed's ‘wait-and-see’ approach to rate cuts is a mistake.

The parade of Fedspeakers this week affirmed key messages from the Fed meeting last week: uncertainty about the outlook, some pessimism about inflation and growth this year with risks skewed toward stagflation, and a willingness to wait for more information before adjusting policy.

DOGE is unlikely to cause a US recession, but its "move fast and break things" approach raises the risks.

Last week, we learned that the Consumer Price Index rose by 0.47% in January, well above expectations.

The Fed’s meeting yesterday lived up to expectations: boring.

On December 18th, the Fed officials voted to reduce the fund’s rate by 25 basis points, tightened their forward guidance on future cuts, and issued a new Summary of Economic Projections (SEP) with more inflation and fewer cuts expected.

My interview on Bloomberg this morning started with a trillion-dollar question:

Many are tying the Democrat losses in the election to high inflation in recent years. There's some truth to that, but it's complicated and it's crucial to take the right lessons.