Nick is starting to let off the beaten lines again, and the message of this post is that the Fed will stay on the sidelines if inflation rises this summer, but the Fed may cut interest rates earlier if employment slows.
Obedient and listening, this is actually paving the way for an early interest rate cut or hedging the market's widely expected September interest rate cut expectations, after all, there are still three months, which is a bit long. The market needs some shot in the arm to get through this difficult three months.
So whether he just paints a big pie or reveals it in advance, this is the overall good news that conveys that interest rate cuts may be advanced.
If prices shoot up this summer, the Fed will likely stay on the sidelines for longer. Labor would have to convincingly sputter to prompt cuts.
But if an anticipated tariff-driven price punch turns out to be a damp squib, earlier cuts are possible
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