Look at that crazy PPI in July and then Walmart’s earnings call, all this is telling us inflation is coming
And Powell even assumes that under normal conditions tariff inflation is just temporary, doesn’t he realize Trump’s global tariffs are completely new, no history at all, an extra cost that can’t be avoided or digested anywhere
And in this situation he even talks about downside risks to jobs, my god
Talking about rate cuts when inflation could blow up anytime is insane, if he loosens money the inflation that was already about to hit will get stronger, businesses and consumers will start anchoring their expectations,Today’s 25 points could end up needing 50 to 75 points of rate hikes later to pay back
The Fed shouldn’t be taking on employment, even if they cut 50 or 100 today, companies might just use it for automation, AI, buybacks, cash… maybe it doesn’t even have 10% of the effect
Production, demand, labor structure, none of this is something the Fed can intervene in
This is just ridiculous
"Was Powell serious about his dovish signals at Jackson Hole?"
byu/AppropriateRefuse590 instocks
Posted by AppropriateRefuse590
10 Comments
Yes and No
inflation was 1 time off
I doubt he will cut in September he said in December
Market is overreacting, inflation will not be transitory.
Next move won’t be a cut
Fed is in a box and will choose the labor market over inflation.
The Walmart earnings call was super dovish but news articles really didn’t capture it. Here are direct quotes
>“Walmart’s prices rose by an average of 1% in the most recent quarter.”
>“We’re going to continue to try to navigate this on an item‑by‑item, category‑by‑category way to minimize the impact on the consumer.”
The EPS was impacted by some very very oddly worded lawsuits / workers comp related stuff – I think $450M for the quarter
I was also just as surprised there was 0 coverage about what the hell this mysterious law problems are and why it’s costing them their profits
>“We had discrete charges related to legal matters and restructuring in the quarter, and those have been adjusted out of operating income and EPS for comparison.”
As a shareholder I’m super happy with the impact of tariffs so far, but suoer weirded out by the weird undisclosed liability issues
>“Adjusted operating income grew 0.4% in constant currency. This is below what we expected going into the quarter as we absorbed a headwind of five sixty basis points for the expenses related to general liability claims in the U.S.”
he’s screwed but market still going up
Assuming tariffs are a one-time thing and Trump won’t keep bringing more forward or increasing them, then tariff inflation is a one-time thing, the prices will increase once at that higher rate then start increasing by the ‘actual’ inflation rate.
I like JPow, he’s a good man, doing his best. But he’s been wrong on inflation before. Remember ‘inflation is only transitory’ back in 2021? He’s got it wrong again here..
I suspect he only hinted at rate cuts cos of the idiot in the white house but doubt we’ll see a rate cut. The next CPI report is coming in hot, cutting now would be insane