MRB on Kiplinger – February 2, 2024
“Fed Chair Powell went out of his way this week to suggest that disinflation and Fed rate cuts are independent of softer or below trend economic growth. However, today’s payroll release is problematic for the Fed, which has doubled down on ‘transitory.’ The underlying trend in core services inflation ex-shelter or supercore inflation (a major component of the core PCE basket) is driven by wage trends. The latest numbers suggest that inflation will bottom this year well above the Fed’s target, limiting the amount of rate cuts.” – Phillip Colmar, global strategist at MRB Partners