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

Rebecca Holmquist advises executives to wait and see on the Iran deal, as there have been too many false signals. She sees the labor market as 'no hire, no fire' but with nuance: healthcare is the only sector adding jobs consistently, and most positions are not being replaced after turnover. AI is causing reallocation, not replacement. Stagflation risk has decreased but not disappeared; three months of good jobs data helps, but core inflation needs to fall further.

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

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Holmquist says even if the deal is signed, oil prices don't instantly drop to consumer level, but the overall direction is lower if the strait reopens. She implies a cautious downward bias.

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She expects the Fed to do nothing this week and sees no immediate catalyst for a move. The labor market is stable but not strong enough to force a hike, and inflation is still being watched.

Tim Stenbeck

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

Most CEOs are skeptical; 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 what executives are saying about the labor market and the 'no hire, no fire' environment.
Rebecca Holmquist

'No hire, no fire' is a headline disguising nuance. The June jobs number (170k+) was good, but the only sector adding jobs consistently over the past 1.5 years is healthcare. The June boom was in leisure/hospitality (World Cup bump). Most positions after turnover/retirement are not being replaced.
Tim Stenbeck

Asks if there are still open positions that are hard to fill.
Rebecca Holmquist

Certain skilled positions (manufacturing, digital) are always a bottleneck, but overall replacement hiring is not happening. One-in, one-out is the norm, not new strategic hires.
Carol Massar

Asks about AI's impact on the labor force.
Rebecca Holmquist

There has been almost no replacement of jobs with AI. Layoffs due to AI are more about reallocation (moving cash flows to justify AI spend) and restructuring (de-layering organizations). Gains are at the team/individual level, not organization-wide.
Carol Massar

Asks if stagflation is still a possibility.
Rebecca Holmquist

Stagflation risk never completely removes. Three months of healthy jobs data takes pressure off, but we need to see core inflation not moving for 1-2 months to confirm it was a supply shock. Even if the deal is signed, oil prices don't instantly translate to lower consumer gas prices.

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