Asks how the Iran war muddies the waters around the February jobs report.
Bonnie Quinn
Veronica Clark
The war won't directly impact the February data, but markets will view it with a grain of salt as it will look stale given recent developments.
Asks what her expectations were for the jobs report before the war.
Bonnie Quinn
Veronica Clark
Expects 30,000 jobs, down due to a healthcare strike impact. Adjusting for that, it's a benign reading with unemployment rising to 4.4%. Nothing to shake the Fed.
Asks if the Fed will be sanguine and if changed rate expectations are appropriate given the war.
Bonnie Quinn
Veronica Clark
Fed was already on hold near-term; higher oil prices don't change that. The macro impact depends on how high and for how long oil stays up. It will boost headline inflation—gas prices alone could add 30-40 bps to March CPI.
Asks at what point we should worry about oil passing through to the broader economy, noting other commodity price rises.
Bonnie Quinn
Veronica Clark
Complicates the picture. Past oil shocks had limited core pass-through, but we have recent goods price stickiness from tariffs. If that continues, goods inflation could be stickier. Labor market is not tight enough to allow much pass-through to services.
Asks what the President can do about oil prices.
Bonnie Quinn
Veronica Clark
Not an oil expert. It's a physical market based on supply/demand, so there's likely limited ability to influence prices via futures.
Asks if she still holds a base case of 75 bps of Fed cuts this year.
Bonnie Quinn
Veronica Clark
Yes, but it depends on the war's progression. Expects cuts in summer/fall, following the pattern of early-year strength in data fading by summer, leading to cuts.