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Macro Monday: The Imminent Fed Pivot?!
The Macro Institute's Weekly Economic Primer
The Macro Institute
July 15, 2024
The big data story of the past week has been inflation. It has plagued the Fed for three years now, and the softer numbers seen in recent months are bound to change the narrative quickly. Worded differently, we are staring at an imminent pivot in the Fed tone and likely the first rate cut in the fed funds rate come September. Fed officials have discussed the need to see measures of inflation closer to their target of 2%, and CPI excluding shelter is already there. Friendly reminder that shelter is THE most lagging component of the inflation equation, so it typically takes more time than other components to adjust to changing conditions. The coming week will see investors focus on earnings season as it kicks into gear, but we also get the first read from PMIs on the month of July with Empire Fed Index, the Phily Fed Index, and the NAHB Homebuilder sentiment series.
The Macro Week In Review
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Top Tweets From The Macro Institute
If there's been one constant in my career it's been my disappointment in the Fed. It's disturbing to hear the world's most prominent central bank say they're "data dependent". Thankfully, the Fed is going to get the data points they're looking for to finally pivot to rate cuts.
— Francois Trahan, M²SD (@FrancoisTrahan)
1:14 PM • Jul 9, 2024
I am working on housing stuff this week. I think most people know I always love to see something I have never seen before, and this is one of those. Home prices have not been this unaffordable (for the median household) in at least 40 years.
— Francois Trahan, M²SD (@FrancoisTrahan)
5:12 PM • Jul 8, 2024
I am revisiting a few things from last week this morning. Friday's employment report had plenty of good news in my opinion (new cycle low in the growth in Average Hourly Earnings for one), but the revision to prior months is interesting.
— Francois Trahan, M²SD (@FrancoisTrahan)
2:05 PM • Jul 8, 2024
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