The Fed needs to revise up its core inflation forecast substantially. Core PCE is tracking above 3%, and to hit their 2.5% year-end target, they'd need 0.2% monthly prints—a tall order, especially with energy passthrough coming.
Asks about the consequence of the Fed remaining on hold for the economy.
Lisa Abramowicz
Neil Dutta
It's not good; it reinforces downside risk to the job market. If the unemployment rate is rising and the Fed isn't easing, it reinforces upside risk to unemployment.
Neil Dutta
The economy is not in the same place as 2022. Real income growth is weak, excess savings are drawn down, and the consumer is on weaker footing.
Asks if we're at risk of losing both rising equity prices and low energy prices, the two pillars of 'Trumponomics'.
Lisa Abramowicz
Neil Dutta
We're losing on energy. The growth shock is more material upfront because the income windfall to producers won't be spent quickly. For now, the stock market is 'trusting in Trump.'