The Rate Guy DOGE Impact on NFP and the UR
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Mar 2, 2025 What if the Fed's inflation target shifted to 2%-3%? The hosts dive into this question while exploring the current state of core PCE and the rising money supply. They discuss the Atlanta Fed's surprising GDP forecast drop and how tariffs play a role in economic shifts. Warning signs in the job market emerge, with layoffs and consumer pullback influencing dynamics. Lastly, the potential impact of treasury yields post-Super Bowl on future interest rates adds an intriguing twist to the economic landscape.
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Inflation Concerns
- Core PCE inflation is at 2.6%, giving the market some relief.
- J.P. Conklin suggests only re-acceleration, not the current level, is concerning.
Arbitrary Inflation Target
- Sarah Conklin questions the market's reaction if the Fed's inflation target was 3% instead of 2%.
- J.P. Conklin agrees, highlighting the arbitrary nature of the 2% target.
Money Velocity and Inflation
- Rising money supply alone doesn't cause inflation; the velocity of money matters.
- Money needs to change hands for inflation to occur, like a high-priced item actually selling.