Prof G Markets The Fed’s September Dilemma: Is it Really Time to Cut Rates?
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Sep 15, 2025 The hosts dive deep into August's inflation data and its implications for potential Fed rate cuts. They discuss the declining number of public companies and how altering earnings report frequency might entice more firms to go public. The conversation shifts to rising youth unemployment globally, highlighting the unique challenges Generation Z faces in the job market. Finally, they explore AI's influence on employment disparities and the worrying trend of companies prioritizing experienced workers over younger candidates.
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Inflation Reading Is More Nuanced Than Headlines
- A single 0.1% monthly PPI decline isn't proof inflation is gone and is misleading when prior months showed big jumps.
- Treat PPI nuance and recent CPI rise (2.9% YoY) as evidence inflation remains sticky.
Cutting Rates Conflicts With Fed Inflation Target
- CPI at 2.9% and elevated PPI suggest inflation is ~90 bps above the Fed's 2% target.
- That gap makes a meaningful rate cut intellectually hard to justify despite market expectations.
Tariffs Are Feeding Renewed Inflation
- Tariffs are showing up gradually in consumer prices and company earnings as higher input costs.
- Expect continued upward pressure on CPI over coming months as tariff effects propagate.
