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Rick Rieder Profile picture
@RickRieder
Aug 23, 2019 • 3 tweets • 3 min read • Read on X
Thus far, the #Fed Symposium at #JacksonHole, Wyoming, and Chair Powell’s morning speech, hasn’t provided much new information, and we think investors need to focus now on Frankfurt, where #ECB President Mario Draghi is expected to unveil significant policy stimulus next month.
On current policy: Chair Powell cites three factors of concern: “slowing global growth, #trade policy uncertainty, and muted #inflation,” which were the reasons behind the July rate cut, and now look to be the justification for the next one at September #FOMC meeting.
Finally, we think that the #Fed will not only lower rates another 25 basis points at its September meeting, but also probably again at its December meeting. Another two #policy rate cuts would bring rates closer to equilibrium, in our view.

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More from @RickRieder

Rick Rieder Profile picture
Nov 14
As usual, today’s #CPI report created great anticipation and then introspection upon its release. It’s always amazing that a few basis points (bps), one way or the other, can have such a large impact on market perception, and presumably on the interpretation of how the @federalreserve will react to such a number.
The truth, however, is that the #Fed considers a multitude of #inflation readings, with a higher emphasis on the Core PCE measure. Yet, we find ourselves at a point in time where the range of outcomes for inflation related to recently solid economic growth, to newly elected political officials, and to the consequential potential for higher tariffs and higher levels of growth, etc., has led to an enormous focus on this number.
To that end, today’s report showed still firm inflation readings of 0.28% month-over-month, and 3.33% year-over-year for Core CPI (which excludes the volatile food and energy components) and 0.24% and 2.60% for headline CPI, over the same time periods.
Read 10 tweets
Rick Rieder Profile picture
Nov 4
Upon reflection, last week’s #JobsReport was, as always, interesting and helpful for understanding where employment currently stands, which is at the top of the priority list for the @federalreserve.
However, the data is also challenging to interpret, in terms of true job growth, given distortions from recent hurricanes in the southeast of the U.S., labor strikes in the Pacific Northwest, and the uncertain impact of these events.
Moreover, this payroll report occurred right in the middle of some major economic and market-moving events, such as the U.S. elections, the announcement of the U.K. budget, major tech and other corporate earnings, the onslaught of other economic data, and this week’s #FOMC meeting.
Read 13 tweets
Rick Rieder Profile picture
Oct 10
Call it the Couldn’t Possibly Ignore report. That’s how important CPI has been in the past few years, as it has kept markets on edge as to what it means for Federal Reserve policy and interest rates across the curve.
It’s still important, but the Fed’s clear focus has shifted toward more balanced priorities, with considerably more emphasis on the labor market for judging how quickly (if at all) to move the Fed funds rate.
In today’s data, Core CPI (excluding volatile food and energy components) printed at 0.31% month-over-month and 3.31% year-over-year.
Read 12 tweets
Rick Rieder Profile picture
Oct 1
CIO Charts of the Week: The Economy Is Doing Better Than We Originally Anticipated

While many called for recession in 2024 due to recent weakness in the labor market, the triggering of the Sahm rule, and generally weaker growth prospects, last week’s GDP revisions from the @bea_news helped to quell many of those concerns for the time being. Real GDP was revised up from 22.9tn to 23.2 tn, thus highlighting that the economy is doing better than previously expected, boasting a 3.0% growth rate quarter over quarter for Q2 and a 3.2% growth rate for 2023.Image
Almost more impressively, GDI, a measure often cited as the better representation of growth through the tracking of income rather than expenditures, had previously been running over $500bn below GDP! This growing discrepancy blurred the picture of the state of the economy and called into question the relative strength of households as they seemed to be spending more via GDP, but not making more via GDI. However, in last week’s revisions, GDI was revised up to match GDP!Image
This paradigm was largely due to impressive upward revision in personal and disposable income spanning back to 2021. So, while the data previously created the narrative that households were stretched and potentially spending beyond their means, these revisions demonstrate that in aggregate, households are in a decent place.Image
Read 5 tweets
Rick Rieder Profile picture
Sep 18
The markets have been riveted with a singular focus on one number, as a reflection of the Federal Reserve policy stance, and the primary question has been whether the Fed would cut 25, or 50, basis points (bps) at today’s meeting.
As if one number carried as much relevance to financial assets as Pi does to mathematics and physics, in determining a circle’s diameter to its circumference.
A 50-bps cut, bringing the Fed Funds rate to 4.75% to 5.00% is not Pi, a special number that reveals many secrets. The future rate path remains uncertain and data dependent, and all that has happened is the Fed has jumped out to a faster start on the path to neural, an appropriate move given how far they are from their likely destination.
Read 10 tweets
Rick Rieder Profile picture
Sep 6
A Thread on Today’s Payrolls Report:

There are some jobs reports over the years that are acutely followed by markets and others that are more of an afterthought. Today’s was the former, and the market reaction casts no doubt on the employment data’s importance. We can see the market's focus shifting from inflation to labor market data in the term-premia being priced around important data releases. It is clear that the labor market data has now overtaken inflation as the most important focus for both markets and the Federal Reserve.Image
While the recent labor market data is clearly softer, it is very far from a disastrous indicator of recession, hard-landing, or some pernicious foreshadowing of future consumer weakness. Rather, we continue to believe the job market is moderating from robust post-COVID demand. In fact, almost none of the recent increase in unemployment has been permanent job losers; rather, it was driven by temporary (weather-related) layoffs in August, which reversed this month, and a steady stream of new entrants.Image
So, while last month’s print famously triggered the Sahm rule, thus sending markets into a frenzy by hinting at the idea that a recession is nigh, we remain firmly in the camp that the data is that of a moderating economy, rather than a one headed towards recession. Even in today’s softer payrolls report, we see that job destruction is nowhere near the typical rate seen at the onset of recessionary periods.Image
Read 5 tweets

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