Money
Fed Rate Hikes Now Seen as Impossible Despite Hawkish Dot Plot
Forward Guidance
The AI Trade Is Finally Cracking | Weekly Roundup
"Why in the world would they hike into that? Why would the Fed say no job growth at 50K or 60K is still too much for this economy? We need to hike into that and bring it down to like zero. That's just totally not what the Fed is supposed to do in these situations is hike into a market to reduce activity that's already tepid and trembling along."
Quinn argues the Fed has no credible reason to hike despite recent hawkish positioning, given weak labor force participation, falling wage growth, and tepid hiring. The unemployment rate drop came from shrinking labor supply, not strength. Forward inflation indicators are falling while growth shows signs of peaking, creating a setup eerily similar to July 2024 when the Fed pivoted dovish after a hawkish mistake.
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Forward Guidance