Stagflation, a scenario of high inflation, weak growth and elevated unemployment, has become a topic of concern for economists and traders amid US trade tariffs, sticky services inflation and slowing GDP growth. Recent tariff hikes have pushed costs higher for many imported goods and consumer inflation expectations have risen with annual headline inflation projected to approach 3.9% by year end as tariffs are implemented. However, the argument for stagflation remains limited due to continued weakness in goo ...

Big for the unemployed ...

Monetary Policy & Economic Outlook - The market interpreted Fed Chair Jerome Powell's statements at Jackson Hole as leaning towards concern about the job market outlook [2] - The industry remains agnostic on the relative likelihood and danger of inflation and unemployment, noting the lack of sustained 2% inflation in recent years and potential consequences of tariffs [3] - The industry emphasizes the importance of the Fed being data-dependent, closely monitoring inflation and unemployment statistics due to stagflationary impulses [4] - The industry suggests the biggest medium-term risk is the failure to achieve a sustained return to 2% inflation, potentially eroding the Fed's credibility [10] Trade & Tariffs - The industry acknowledges the upending of global trade under the Trump administration, particularly due to tariffs [6] - The industry anticipates more inflation than would occur without substantial tariffs, while also acknowledging potential deflationary or disinflationary effects [9] Fed Independence & Political Pressure - The industry expresses confidence in J Powell's integrity, even amidst political pressure, and believes his actions are based on conviction [12][13] - The industry views the potential firing of Lisa Cook, Fed Governor, as concerning, highlighting the potential weaponization of regulatory power [15][16][17] Deals-Based Capitalism - The industry is surprised by the government taking a 10% stake in Intel, viewing it as part of a problematic "deals-based capitalism" approach [18][19][20][21]

Economic Outlook - The Federal Reserve perceives unemployment as a greater threat than inflation [1] - The U S dollar's purchasing power has decreased by 40% since 2000 [1] Investment Strategy - Asset ownership is crucial to avoid financial disadvantage [1]

Labor Market - Unemployment remains low [1] - Companies haven't been all that interested in hiring [1]

Federal Reserve Policy & Economic Outlook - Federal Reserve Chairman Jerome Powell's speech at the Kansas City Fed's 2025 Jackson Hole Economic Policy Symposium suggested potential future rate cuts [1] - Yahoo Finance interviewed current and former Fed presidents regarding their perspectives on the US economy, inflation, and interest rates [1] Speakers & Affiliations - The discussion included insights from Kansas City Fed President Jeffrey Schmid [1] - Cleveland Fed President Beth Hammack shared her views [1] - Former St Louis Fed President Jim Bullard contributed to the conversation [1] - Former Philadelphia Fed President Patrick Harker provided his analysis [1] - Former Kansas City Fed President Esther George also participated [1] Yahoo Finance Resources - Yahoo Finance offers free stock ticker data, up-to-date news, portfolio management resources, comprehensive market data, and advanced tools [1] - The platform provides information to help users manage their financial lives [1]

going on that's much more positive, right. >> Although the question is how far we are into that process. Yeah.Speaking on that point, we want to get back to Jackson Hole, where Steve Liesman joins us with Cleveland Fed President Hammock. Hey, Steve. >> Hey, Carl.Thank you. We are here with the Cleveland Fed president Beth Hammock, celebrating her one year and one day anniversary as the new president of the Cleveland Fed. Thanks for joining us, Beth. >> Thanks for having me, Steve.>> How do you react when yo ...

Monetary Policy Stance - The speech was perceived as mildly dovish, with language suggesting a potential tilt towards easing [1][2][4] - The speaker highlighted the phrase "policy in restrictive territory, it may warrant adjusting our policy stance" as indicative of a dovish tilt [2] - The Fed faces the challenge of balancing restrictive policy with inflation potentially remaining in the 3% range over the next 6 months [5] - The speaker believes the Fed's stance is slightly restrictive [5] Inflation and Labor Market - Professional forecasters expect inflation measures to start with a 3, not a 2, for the next two quarters [3] - Downside risks are present in the labor market, potentially impacting wage hikes [2] - The speaker believes unemployment risks may be overweighted compared to inflation risks [5] - The labor market is slowing down compared to previous periods [5] Future Outlook and Data Dependency - The speaker emphasizes that the potential policy adjustment is not a promise but contingent on upcoming data [6][7] - Key data releases before the September meeting include a CPI report, a PCE report, and an unemployment report [6] - The Fed has left the door open to adjust its course if the data deviates significantly from the current trend [6]

Economic Conditions & Policy Stance - The economy faced new challenges, including significantly higher tariffs from trading partners reshaping the global trading system [2] - Tighter immigration policies led to an abrupt slowdown in labor force growth [2] - Changes in tax, spending, and regulatory policies may have important implications for economic growth and productivity [3] - Downside risks to employment are rising, potentially leading to sharply higher layoffs and rising unemployment [4] - The policy rate is now 100 basis points (1%) closer to neutral than a year ago [6] - Monetary policy is not on a preset course; decisions are based on data assessment and its implications for the economic outlook and balance of risks [7] Inflation & Employment - Risks to inflation are tilted to the upside, while risks to employment are tilted to the downside in the near term [5] - The labor market appears to be in balance, but it's a balance resulting from a marked slowing in both the supply of and demand for workers [3] - The stability of the unemployment rate allows for careful consideration of policy stance changes [6] Monetary Policy Implications - The framework calls for balancing both sides of the dual mandate (inflation and employment) [6] - With policy in restrictive territory, the shifting balance of risks may warrant adjusting the policy stance [6] - The restrictive policy stance was appropriate to help bring down inflation and foster a sustainable balance between aggregate demand and supply [1]

We're going to go right now to Jay Powell has become speaking and delivering this speech. >> In my remarks today, I will first address the current economic situation in the near term outlook for monetary policy. I will then turn to the results of our second public review of our monetary policy framework, as captured in the revised Statement on Longer Run Goals and Monetary Policy Strategy that we released today.When I appeared at this podium one year ago, the economy was at an inflection point. Our policy r ...