fedratedecisions

Truflation is showing US inflation near 0.68% while layoffs, credit defaults, and bankruptcies are all rising, yet the Fed still says the economy is strong.

If you look at the economy right now and compare it with what the Fed is saying publicly, there is a very clear disconnect building.

The Fed keeps repeating that the job market is still strong. But real data coming out from layoffs, hiring slowdowns, and wage trends is telling a different story.

We are already seeing cracks forming beneath the surface. The labor market is not collapsing overnight, but it is clearly weakening faster than what official statements suggest.

The same disconnect shows up in inflation data.

The Fed continues to say inflation is still sticky and not fully under control. But real time inflation trackers like Truflation are now showing inflation running close to 0.68%.
$XRP
That level is not signaling overheating.

It is signaling that price pressures are cooling rapidly and the economy is moving closer toward disinflation and potentially deflation if the trend continues.

And deflation is a much bigger risk than inflation. Inflation slows spending but deflation stops spending. When consumers expect prices to fall, they delay purchases, businesses cut production, margins shrink, and layoffs accelerate.

That is when economic slowdowns turn into deeper recessions.

Another area flashing warning signs is credit stress. Credit card delinquencies are rising. Auto loan defaults are rising. Corporate credit stress is rising.

These are late cycle signals that usually appear when households and businesses are already struggling with higher rates.

Bankruptcies are also moving higher across sectors.

This shows that the cost of capital is starting to break weaker balance sheets. Small businesses and over-leveraged companies are feeling the pressure first but that pressure spreads if policy stays tight for too long.

So the bigger question becomes policy timing.

If inflation is already cooling…
If the labor market is already weakening…
If credit stress is already rising…

Then holding rates restrictive for too long can amplify the slowdown instead of stabilizing it.

Monetary policy works with a lag. Which means by the time the Fed reacts to confirmed weakness in lagging data, the damage is often already done.

That is the risk the market is starting to price in now. This is no longer just about inflation control.

It is about whether policy is now overtight relative to real-time economic conditions.

And if that is the case, then the next phase of the cycle will not be driven by inflation fears… It will be driven by growth fears and policy reversal expectations.

That is why the Is the Fed too late? question is starting to matter more for markets going into the next few months.

#WarshFedPolicyOutlook #FedRateDecisions #FedRateCut

Proč včerejší výprodej nebyl náhodný — byl strukturální

A proč se trhy najednou přehodnocují likviditu

Ostrý výprodej, který jsme viděli včera, se neobjevil z ničeho nic. Začal téměř okamžitě poté, co trhy s predikcemi ocenily výrazně vyšší pravděpodobnost, že se Kevin Warsh stane novým předsedou Federálního rezervního systému.

Ta reakce nebyla emocionální. Byla strukturální.

Obchodníci nepanicovali, protože Warsh je neznámý — prodávali, protože znají jeho výsledky a co to pravděpodobně znamená pro likviditu do budoucna.

#FedRateDecisions #FedNews #WhoIsNextFedChair #FederalSecurityLaws #MarketCorrection
S nástupem nového předsedy Federálního rezervního systému do jeho úřadu a oznámením o flexibilnějších měnových politikách vstoupily finanční trhy do fáze opatrného očekávání. Digitální měny, jakožto nejcitlivější aktiva na změny v měnové politice, dnes čelí přímému střetu s rozhodnutími Federálního rezervního systému, která mohou přetvořit mapu globálních investic.