Jerome Powell gave a much-awaited speech at the Kansas City Fed symposium at Jackson Hole this morning. Because of rising/hotter economic data, and a hawkish tone to the Fed lately, I thought he would lean hawkishly. He didn’t, but he wasn’t dovish either. Overall, the…

After the July payrolls report was released on August 1st, dovishness was in the air as regional Fed bank presidents Mary Daly and Neel Kashkari leapt to support the idea of near-term cuts because the labor market had weakened to a recessionary level (see chart…

I wrote in last Friday’s LDEI update regarding the large downward revisions for non-farm payrolls, From this data, I expect more FOMC members to defect to Waller and Bowman’s dovish camp. And within a few days it happened. San Francisco Fed President Mary Daly made…

After the last FOMC meeting, I wrote, “Powell didn’t give an inch”, referring to his avoidance of acknowledging economic weakness. In this meeting, there were some acknowledgements of economic weakness (half an inch, let’s say), but Powell did his best to be dismissive of them…

Last month, with economic data weakening quickly and Federal Reserve Governor Christopher Waller lobbying for a cut, I expected the Fed to cut rates at the FOMC meeting this week. But upon the strong payroll report on July 3rd, I wrote in my semi-weekly LDEI…

Stock bulls have something of a mantra now, “the recession is cancelled” from forecasts of GDP to rise significantly in Q2, tariffs coming down, and the Fed’s characterization of the economy as “solid.” These three pillars have reinforced each other to create an optimistic narrative…

News stories abounded in the last two days reporting that the US Dollar (DXY index) had the worst first half since 1973. See examples below: Financial Times: Bloomberg: The New York Times: The Wall Street Journal: Also, stories from the New York Post, The Guardian,…

The National Bureau of Economic Research (NBER), the official arbiter of recessions, uses six monthly indicators to determine recessions. It looks for a contemporaneous peak across them to know that a downturn is sufficiently spread across the economy (diffusion). The NBER looks for three qualities…

After months of the Fed avoiding any discussion of the economy weakening (see here and here), Federal Reserve Governor Christopher Waller, in a CNBC interview with Steve Liesman on Friday, finally acknowledged what has become stark in the economic data (LDEI), the economy is becoming…

I thought Federal Reserve Chairman Jerome Powell would begin to acknowledge economic weakness at the FOMC meeting yesterday given all the deterioration I wrote about on Tuesday, but he didn’t — at all. Jeffrey Rosenberg of Blackrock aptly said the Fed is in ‘nothing to…