Eurodollar University This Is What Happens Before Every MAJOR Rate Cut
Jul 11, 2025
Recent payroll data and FOMC minutes hint at a possible July rate cut. Despite seemingly positive job numbers, there are concerning signs such as falling hourly earnings and reduced work hours. This chapter explores the mixed signals in the labor market and their implications for Federal Reserve actions. It also critiques traditional inflation theories, suggesting a low inflation risk, while analyzing how the swap market might forecast future interest rates. Will policymakers avoid repeating past mistakes? Tune in for the insights!
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Fed Minutes Reveal Policy Signals
- The Fed's minutes often reveal a different tone than the public meeting and press conferences.
- They can show openness to policy changes like rate cuts even when headlines suggest otherwise.
Theory vs Reality in Fed Risks
- Inflation fears among some Fed officials are theoretical and not supported by current data.
- Real labor market weakness is evident and poses a more immediate risk to the economy.
Labor Data Hides Economic Weakness
- Payroll headline numbers mask true labor market weakness seen in falling hours and declining hourly earnings.
- These labor data weaknesses are rare and highly significant economic warning signs.