The Feds goal was to cool inflation and cool labor market. Historically the highest inflation rate was around 20%, in 1917 and it hit 9% in 2022 and was worldwide but it's around 3% now. Won't get into the debate about greedflation and record corporate profits issue but end of the day what the Fed was wanting has been done. It's not yet at 2% target but I bet the Fed will still cut rates in September.
Your analysis is spot on but for some reason Powell and others at the fed have been hesitant to signal that it's time to cut rates. The past few conferences he's seemed to shift his focus from CPI/PPI/PCE reports to unemployment. Although trending up, unemployment is still historically low. In my opinion, Powell is using this as a way to keep rates where they are because of what he calls a strong labor market. The jobs reports and subsequent downward revisions seem to suggest otherwise and my fear that is that the fed waits until after the election to do its first rate cut where by then it will be too late and a hard landing will occur.
The Feds goal was to cool inflation and cool labor market. Historically the highest inflation rate was around 20%, in 1917 and it hit 9% in 2022 and was worldwide but it's around 3% now. Won't get into the debate about greedflation and record corporate profits issue but end of the day what the Fed was wanting has been done. It's not yet at 2% target but I bet the Fed will still cut rates in September.
Your analysis is spot on but for some reason Powell and others at the fed have been hesitant to signal that it's time to cut rates. The past few conferences he's seemed to shift his focus from CPI/PPI/PCE reports to unemployment. Although trending up, unemployment is still historically low. In my opinion, Powell is using this as a way to keep rates where they are because of what he calls a strong labor market.
The jobs reports and subsequent downward revisions seem to suggest otherwise and my fear that is that the fed waits until after the election to do its first rate cut where by then it will be too late and a hard landing will occur.