I hope everyone is enjoying their weekend. Kevin Warsh had his FOMC debut, and we are definitely in a new regime. Less forward guidance by the Fed was his mantra, but the dot plot stole the show. The Fed has turned hawkish, but do they really understand the root of the problem, and are they hawkish enough? That is what we will explore below.
In terms of data for this week, on Tuesday we get S&P PMIs and Richmond Fed. Wednesday has building permits and new home sales. Thursday has durable goods and PCE and income/spending. Friday has UMICH.
We should also hear a lot from FOMC governors this week about their newest hawkish forecasts.
I put out a brief but important note on wage growth this week The Wage Slowdown Fallacy. I have done more work on this which I will share below.
I also plan to release my latest AI focused note this week.
Let’s dig in.