Kansas City Fed services data just came in hotter than expected—activity index jumped to +10 from flat last month, blowing past the +1 forecast.
What caught my eye: revenue growth more than doubled to +16 from +6. That's not just noise. Employment finally turned positive at +2 after being deeply negative at -10.
Prices remain elevated on both sides—what businesses pay and what they charge—but both eased slightly from September.
This is the kind of data that makes the Fed's job harder. Services are still running warm, businesses are hiring again, and pricing power hasn't collapsed. The soft landing narrative looks increasingly plausible, but it also means rates might stay higher than the market wants to believe.
We're not in a recession. We're in a grind.
What caught my eye: revenue growth more than doubled to +16 from +6. That's not just noise. Employment finally turned positive at +2 after being deeply negative at -10.
Prices remain elevated on both sides—what businesses pay and what they charge—but both eased slightly from September.
This is the kind of data that makes the Fed's job harder. Services are still running warm, businesses are hiring again, and pricing power hasn't collapsed. The soft landing narrative looks increasingly plausible, but it also means rates might stay higher than the market wants to believe.
We're not in a recession. We're in a grind.