Notable Stocks broke down. And that flipped the script on Fed policy. A few weeks later, Jerome Powell went to Jackson Hole and declared it "time for policy to adjust." Again, the jobs growth was persistently slowing, and the Fed's favored inflation gauge (PCE) was 2.5%. A month ago,Mr.Powell said they expected tariffs to show up in goods inflation over the summer. The Fed’s messaging was centered on “uncertainty.” They were in wait-and-see mode.
SEE MORENotably； Previous month, two voting Fed members have said they favor a rate cut at this meeting and both of which are voices respected by the Fed Chair (Powell). It was Bowman's big speech last month that revealed the Fed's plan to finally reform the bank leverage ratio rule that has been distorting liquidity, and creating unnecessary liquidity risk in the U.S. Treasury market. In the same speech, she said: "should inflation pressures remain contained, I would support lowering the policy rate as soon as our next meeting."
SEE MORENotably; days after Fed decision on monetary policy, and President Mr. Trump tightened the screws on Mr.Jerome Powell today with an impromptu, in-person visit (to the Fed). Still, markets aren't budging. There's effectively zero chance priced in for a cut next week. And the betting Stockmarkets on an early Mr.Powell exit are barely changed, even after Mr.Trump outright called for Mr. Powell's resignation two weeks ago.
SEE MOREMr.Trump and company have quickly drawn most of the world back into alignment with the U.S., using the U.S. consumer, U.S. financial stability and U.S. security as leverage.
SEE MORENotably;Mr.Jerome Powell may have officially become a lame duck Fed Chair Previous week (functionally weakened). And a "shadow Fed" may now be a reality, and with meaningful influence on markets. Remember, it was the interview with Mr.Kevin Warsh (a Mr.Trump candidate to replace Mr.Powell) last Thursday that might have been the inflection point. It's only Monday, and already the drumbeat for Fed regime change has grown louder.
SEE MOREBased of those inputs of CPI and PPI, the Fed's preferred inflation gauge ;personal consumption expenditures (PCE) , is now expected to come in at an annual change of 2.5%.That's an uptick of a couple of tenths of a percent, and it's moving away from the Fed's 2% target.
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