Stagflation risk and labor market (with Carol Massar, Tim Stenbeck)

Holmquist advises healthy skepticism on the Iran deal; executives are in wait-and-see mode. The labor market shows 'no hire, no fire' with nuance: healthcare is the only sector adding jobs consistently. AI is causing reallocation, not replacement. Stagflation risk has eased but not disappeared.

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London Business School 3.0
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Rebecca Holmquist 7.0

Stagflation risk and labor market (with Carol Massar, Tim Stenbeck)

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Even if the deal is signed, it doesn't mean that oil prices drop down and that translates to consumer gas prices. We need to understand what's going to happen to the strait, tolls, etc.

yields

Holmquist expects the Fed to do nothing this week, and stagflation risk has eased but not disappeared. This suggests yields remain rangebound in the near term.

Tim Stenbeck

Asks whether the recent ceasefire action feels like nearing the end of the conflict.
Rebecca Holmquist

Most CEOs are looking at today's news with healthy skepticism. We've been a couple days away from a deal for 100 days. Until details are announced, it's wait and see.
Carol Massar

Asks about the Fed meeting and what executives are saying about the labor market.
Rebecca Holmquist

The Fed is very unlikely to move this week. On the labor market, 'no hire, no fire' disguises nuance: healthcare is the only sector adding jobs consistently over the past 1.5 years. The June boom was in leisure/hospitality (World Cup bump).
Tim Stenbeck

Asks about the nuance: are there open positions that are hard to fill?
Rebecca Holmquist

Certain skilled positions (manufacturing, digital) are always a bottleneck. But most organizations are not doing overall replacement; normal turnover often leads to positions not being reopened.
Carol Massar

Asks about the impact of AI on the labor force.
Rebecca Holmquist

There has been almost no replacement of jobs with AI so far. Layoffs due to AI are more about reallocation and restructuring to move cash flows to justify AI investment spend.
Carol Massar

Asks whether stagflation is still a possibility.
Rebecca Holmquist

Stagflation never completely removes from the situation. Three months of healthy jobs numbers take pressure off. If core inflation doesn't move much in July, and it was a supply shock, fears would be taken down.

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