Fed is going to raise rates due to inflation, says economist #shorts #inflation #pce #fed #politics

Core PCE at 3.4% is the highest since 2023. All inflation measures (CPI, core CPI, services ex-energy/housing) show 3-6 month rates well above 3%. Services inflation near 4% will fuel wage demands as labor market improves. The resilient Trump economy and fiscal boost from last year's OOOT triple B mean inflation won't fall short-term. Real rates have shrunk, forcing the Fed to raise nominal rates to compensate.

Yields up , short term, interviewee explicit

explicit

NDX

RUT

Oil

Metals

USD

SMBC 9.0
Commercial Bank
Joseph Lavorgna 7.0

Fed is going to raise rates due to inflation, says economist #shorts #inflation #pce #fed #politics

US 10y

yields

There's no way they're going to cut rates. They're going to raise rates in my view... the Fed will have to offset that rise... with raising that nominal rate.

Core PCE data today is 3.4% year-on-year, the highest since 2023. Questions whether the Fed can ease policy into this environment or if it demands tighter policy and hikes.

Joe Kernen
Joseph Lavorgna

There is no way the Fed will cut rates; they will raise rates. All inflation measures (core PCE, overall PCE, CPI, core CPI) show 3 and 6 month rates of change well above 3%. Services inflation excluding energy and housing is running close to 4%, which will drive wage demands as the labor market improves.

The Trump economy is resilient and dynamic, getting a huge positive thrust from last year's OOOT triple B signed on July 4th. The rise in inflation means real interest rates have shrunk, and the Fed will have to offset that decline by raising nominal rates.

SignalTube

markets at a glance