The Macro Trading Floor What If The Fed Made a Mistake?
7 snips
Oct 11, 2024 Recent U.S. macro data shows surprising core inflation and jobless claims influenced by a hurricane. With Trump leading polls, potential inflationary policies are on the horizon. Insightful discussions about the Fed's 50 bps cut bring up questions about mistakes made in response to evolving economic indicators. The turbulence in China's stock market and its implications for potential stimulus measures are also explored. Additionally, the role of seasonality in trading highlights both skepticism and opportunities within the market.
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Core PCE and Fed Policy
- Core PCE, the Fed's preferred inflation measure, historically runs lower than CPI.
- If Core PCE settles around 2.5%, the Fed likely won't intervene as long as inflation expectations remain anchored.
Hurricane Ian and Jobless Claims
- Brent Donnelly notes that initial jobless claims spiked due to Hurricane Ian.
- This data distortion might not make the Fed more dovish due to increased uncertainty.
Supercore Inflation and Fed Rhetoric
- Powell emphasized "Supercore" inflation when wanting to appear hawkish.
- Now, he avoids mentioning it, highlighting the Fed's evolving focus.
