Kevin Warsh has gotten caught in a real web. What lies ahead for the market? 📉
Today’s PPI and Core PPI data were truly “delightful”… in the worst possible way. PPI surged to 6.3%—its highest level in 45 months! Core PPI wasn’t any kinder to our nerves, either, hitting a 44-month high.
Add yesterday’s CPI and Core CPI figures, which also came in hotter than all forecasts, and there’s only one conclusion: it’s still too early to say inflation is fully under control.
You’d think the solution for the Fed would be simple: raise rates and keep squeezing inflation. But then a second problem crops up: the labor market is starting to crumble. Unemployment has already risen to 4.2%.
And there it is—the main trap facing Warsh and the Fed:
1️⃣ Raise rates: bring inflation down, but deal a final blow to the labor market and economic activity.
2️⃣ Hit pause: give the labor market room to breathe, but risk driving inflation back up to levels that would force the Fed to switch back to a tough “hawkish” stance, as it did in 2022.
In short, there are no easy ways out of this stagflationary corner anymore.#CPIWatch #WarshPushesToScaleBackForwardGuidanceAndDotPlot
#SouthKoreaPlansTighterCybersecurityRules
#BlackRockCryptoAssetsJump63%
$BTC
$NVDA
$XAU
Today’s PPI and Core PPI data were truly “delightful”… in the worst possible way. PPI surged to 6.3%—its highest level in 45 months! Core PPI wasn’t any kinder to our nerves, either, hitting a 44-month high.
Add yesterday’s CPI and Core CPI figures, which also came in hotter than all forecasts, and there’s only one conclusion: it’s still too early to say inflation is fully under control.
You’d think the solution for the Fed would be simple: raise rates and keep squeezing inflation. But then a second problem crops up: the labor market is starting to crumble. Unemployment has already risen to 4.2%.
And there it is—the main trap facing Warsh and the Fed:
1️⃣ Raise rates: bring inflation down, but deal a final blow to the labor market and economic activity.
2️⃣ Hit pause: give the labor market room to breathe, but risk driving inflation back up to levels that would force the Fed to switch back to a tough “hawkish” stance, as it did in 2022.
In short, there are no easy ways out of this stagflationary corner anymore.#CPIWatch #WarshPushesToScaleBackForwardGuidanceAndDotPlot
#SouthKoreaPlansTighterCybersecurityRules
#BlackRockCryptoAssetsJump63%
$BTC
$NVDA
$XAU