Fed's Goolsbee: I feel 'a lot better' about multiple months of improvement in CPI

N

Nighthawk

  • It's very clear that inflation has come way down in 12-18 months
  • This is about as fast as inflation has ever fallen
  • Inflation path isn't done but it makes me feel a lot better to see components decline, including housing
  • The labor market has been cooling to a position of better balance
  • So far this doesn't look like a recession in the labor market but there are warning lights
  • We want to be stable at full employment
  • If you saw a sharp of an uptick in unemployment, you would be justified to be agitated about the unemployment level. Thus far it doesn't look like that.
  • Unemployment needs to steady
  • I don't like to tie our hands on future meetings, we have plenty of data coming
  • The more months of data that look like recent data, the closer you get to 2%
The market is fully priced for a September cut and is priced for 64 bps in easing this year.

https://www.forexlive.com/centralba...ltiple-months-of-improvement-in-cpi-20240718/
 
Isn't it interesting... one Fed guy says, "no interest rate cuts for the rest of the year". Another Fed guy says, "should be a rate cut next week". What's a trader to do??

Personally, I think it would be best overall for Fed to do a big rate HIKE... and drain the $9T "excess liquidity" sloshing around the monetary system. That's what the economy needs to quell inflation.

Such medicine would be painful for some for a while, but better in the long run.
 
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