Humility
Persistent disinflation, the price of labor, FOMC humility, S&P upside analysis
Thread 🧵1/9
The Path from 9 to 4, uh 3, uh…
It’s never different this time, but it is also generally not the same as the last time. This week increased our confidence that the 10-month 25% 2/9
S&P 500 decline was not recession related, rather the second largest Fed policy correction since WWII. Prior to the QE era, Fed related corrections generally occurred once a business cycle, however in the ‘10s we had 8 and the size was proportional to the change in

Don't Fight the 2s
Fed fighting the 2s, 3-month macro rule, disinflation, banks on track for a face ripping rally
Thread 1/12 🧵
It’s Their Story and They’re Sticking Too It
In last week’s note, Return to Normalcy, we explained why the Fed’s case for additional rates hikes had 2/12
been weakened considerably by sharply decelerating nonsupervisory average hourly earnings in services producing industries. Thursday’s CPI services less rent of shelter reading was yet another significant setback. In Q4, while Chairman Powell and the Committee were

Thread: Substantial Further Progress

1/ Everywhere we turned this week there was dismissal of supply-side economics. As Larry Lindsey stated on CNBC Friday morning, the plan is ‘to tax the supply-side of the economy and increase aggregate demand. 2/ More demand and less supply, it isn’t hard to figure out what happens next.’ In Chairman Powell’s press conference discussion of inflation, he described both base effects and bottlenecks as transitory, apparently never considering that stretched supply chains