The Breakdown Powell Inches Towards Rate Cuts
Jul 11, 2024
The podcast delves into the possibility of rate cuts following Powell's commentary, alongside discussions on global economic landscapes, political developments in France, the UK, and Argentina, and the historical impact of rate cuts on the stock market. Additionally, it explores the labor market focus, international financial system dynamics, and Argentina's economic reforms under Mille's leadership.
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Powell's Economic Concerns
- Jerome Powell, in his Senate hearing, voiced growing concerns about a potential economic slowdown.
- He highlighted the balancing act between managing inflation and preventing a rise in unemployment.
Shifting Focus to Labor Market
- The labor market is showing signs of weakening, which might prompt the Fed to take action.
- Several economists believe Powell's primary focus has shifted from inflation to the labor market.
Rate Cut Speculation and Concerns
- Rate cuts are expected this year, with speculation mainly around how and when Powell will announce them.
- Some analysts advise caution, noting that rate cuts are historically correlated with recessions.