THE FED, PLAINLY Druckenmiller had it right: earnings don’t move the overall market, liquidity does. But most people watching the Fed are watching the wrong number. The rate that matters is the real rate: the policy rate minus expected inflation. The Fed sets the first. The
Core CPI rose 2.4% year over year, the lowest reading since March 2021. That is not a victory lap, but it is a meaningful change in the inflation backdrop. Headline CPI was 3.4% year over year and core rose 0.3% month over month. The mix says inflation is still above target, yet the underlying trend
Core CPI at 2.4% Gives the Fed More Room to Wait Read More »
“Rate hike would engineer a private sector recession.” Remember the Fed has a dual mandate: Price stability and maximun employment. A rate hike would destroy BOTH: It will NOT bring down gas, diesel prices or shelter costs. It WILL hurt job creation, investment and
Rate hike would engineer a private sector recession. Read More »
Inflation is cooling, and that changes the Feds next decision. Chris Wallers own words point to the shift: recent data finally show signs of disinflation. If the August data confirm that progress toward 2% is real, holding rates at 3.50%3.75% may be enoughand a cut can return to the table. The key is the reaction
Disinflation Returns: Could the Fed Cut Again? Read More »
The Fed is on a tight rope. The best choice is to drastically cut rates since they are losing the long end regardless. Will they do it? Great work @NTLiveMedia @chigrl
The Fed Is on a Tight Rope Read More »
The Fed does not have to hike to tighten. It can keep the policy rate unchanged while expectations fall and the nominal rate refuses to move. The real rate then rises on its ownno vote, press conference, or new rate decision required. That gap is not sitting still. When inflation expectations come down, the same
The Fed Can Tighten Without Hiking Read More »
Core PCE is still elevated, but the latest details do not point to a rate hike. Inflation is not fully defeated, yet growth is not the problem: the private sector is showing more resilience than the pessimists assume. The supporting data matters. Core PCE is running at 3.3%, July income rose 0.4% against a 0.2%
Core PCE Gives No Reason for a Rate Hike Read More »
The chair changes the answer. Stanley Druckenmiller is second to none on macro, but an investor optimizing for one variable is solving a different problem from a sitting Treasury secretary. A Treasury secretary has to weigh geopolitics, national security, and the auction calendar alongside market outcomes. Those constraints are not theoretical; they come with actual
The Chair Changes the Answer: Why Policy Depends on the Hat Read More »
The mechanism is right as Luke states, and I’d argue it’s the correct play. Term the debt into bills, build real demand for those bills through stablecoins, and get the interest line down. Every option on the table is a version of who absorbs the adjustment. Austerity absorbs it through the real economy, and nobody
Who absorbs the adjustment Read More »
