First Friday: Jobs Are Cooling, Prices Are Climbing, and NYC is Freezing the Rent

About this episode

This episode discusses the cooling job market, rising inflation, and the implications for the Federal Reserve's upcoming decisions.

#729: The U.S. added 57,000 jobs in June. Economists expected 115,000. Meanwhile, inflation hit a three-year high. The Personal Consumption Expenditures index - the Fed's favorite inflation gauge - jumped 4.1 percent year-over-year. That combination creates a problem. Weak jobs usually push the Fed to cut rates. Hot inflation pushes them to hike. In this First Friday episode, we break down which way the Fed might lean at its September meeting, and why traders see an 80 percent chance rates stay frozen for now. We also dig into Kevin Warsh's debut as Fed Chairman. His first official statement ran only 132 words, one of the shortest in Fed history. He cut forward guidance – the practice of making guesses about what the Fed will do next. He removed the names of dissenting voters. His statement mentioned price stability but skipped maximum employment, and we explain why that omission matters. Central banks around the world moved in the opposite direction. The European Central Bank raised rates for the first time since 2023, responding to a 10.9 percent surge in energy prices. The Bank of Japan hiked rates to their highest level in 31 years. Australia, Norway, Indonesia, the…

People in this episode

Host: Paula Pant

Topics covered

• job market
• inflation
• Federal Reserve
• interest rates
• global economy
• consumer spending

Keywords

• jobs
• inflation
• Federal Reserve
• interest rates
• consumer spending
• global economy
• Kevin Warsh

Mentioned in this episode

Organizations: European Central Bank, Bank of Japan, Australia, Norway, Indonesia, Philippines, Israel, Brazil

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