Macro Horizons Giving Thanks
Nov 26, 2025
This week, the hosts dive into the recent ADP weakness and its implications for labor markets and Fed expectations. They analyze disappointing retail sales and what it means for core PCE momentum. Discussion turns to the uncertainty caused by government shutdowns, while they review Treasury yields and rising odds of Fed cuts. The hosts debate the Fed's focus on economy-wide versus asset-driven demand. They also highlight upcoming private indicators that could influence market expectations. A year-end yield target of 3.85% rounds out their insights.
AI Snips
Chapters
Transcript
Episode notes
Early Private Data Shows Labor Softening
- ADP's weak weekly series signaled labor-market softening well before official BLS data arrives.
- Combined with soft retail and PPI, this points to downside risks for growth and inflation into year-end.
December Decision Sets 2026 Narrative
- Markets are split on December: either a cut with dovish guidance or a cut paired with slower 2026 easing.
- The Fed's December message will heavily shape 2026 yield paths and curve structure.
Wealth Effects Complicate Fed Choices
- Equity swings may push financial conditions into the Fed's calculus but are unreliable as a persistent driver.
- The Fed faces distributional trade-offs between wealthy asset owners and lower-income households when setting policy.