Monetary Policy & Framework - The industry observes an odd timing for a major new framework announcement from the Fed, suggesting it should be addressed by the incoming chairman after consultation [1][2] - The industry notes the Fed's past errors leaned towards excessive transparency and forecasting, leading to iatrogenic volatility, and suggests fewer dot plots and forecasts [2][3] - The industry suggests a return to a more vague and oracular approach, similar to Volcker and Greenspan, given the current challenge of preventing high inflation expectations from becoming embedded [4][5] - The industry emphasizes the importance of symmetry with respect to inflation and learning from the previous framework's shortcomings [6] - The industry highlights the need for careful consideration of the management of the maturity structure of the federal debt, especially when the Treasury and the Fed have conflicting objectives [7] Inflation & Interest Rates - The industry acknowledges persistent inflation above the 2% target, yet markets anticipate a Fed rate cut in September [8] - The industry notes evidence of economic weakening is likely driving market expectations for a Fed rate ease [9] - The industry interprets the market's anticipation of a 25 basis point cut in September as a likelihood, with possibilities of 50 basis points or zero being equally likely [10] - The industry cautions against certainty about future actions, as data could push towards a 50 basis point cut or further delay [11] Economic & Geopolitical Considerations - The industry expresses surprise at the Treasury Secretary's prescriptive stance on monetary policy, suggesting a 175 basis point cut [12][13] - The industry suggests elevated deficit spending, data center spending, reduced trade deficits, and higher asset prices may be raising the net demand for funds, potentially increasing neutral interest rates [15] - The industry expresses disappointment that President Trump hasn't leveraged frozen Russian reserves to drive a just peace with Ukraine [17][18]

Market Trends & Dynamics - Coffee prices spiked 145% in July year-over-year, with average retail price for a pound of ground coffee hitting $841 [1] - Coffee futures are at their highest level in two months and having their best month since January [15] - The US gets more than a third of its unroasted coffee imports from Brazil, the world's top coffee producer [1] - The US coffee industry imports most of its coffee from Latin America, including Brazil, but there are options to import more coffee from places like Vietnam, Indonesia, and Ethiopia [5] Impact of Tariffs - President Trump's 50% tariffs on imports from Brazil are about to worsen coffee prices [1] - Tariffs will likely have noticeable impacts on food prices in the coming weeks and months [3] - The brunt of these tariffs will be borne by a combination of firms, typically manufacturers, retailers, and mostly consumers [12] - Steel and aluminum tariffs on places like China will further impact the coffee supply chain in terms of packaging and capital inputs [19] Supply Chain & Production - The supply of coffee is inelastic, meaning there are limited stores of coffee available for immediate purchase [5][6] - Domestic coffee production in the US (Hawaii and Puerto Rico) accounts for approximately 1% of the coffee consumed [8][9] - There is effectively no capacity to ramp up domestic coffee production to substitute imports [9] Pricing & Inflation - Coffee price inflation is already one of the fastest-moving categories in terms of the CPI and is expected to continue to climb in the next 3 to 5 months [14][15] - Food companies operate on very thin margins, limiting their capacity to absorb tariff costs [12][13] - Producer Price Index (PPI) for coffee beans has been increasing more dramatically than retail prices, indicating further price increases to come [18]

I want to welcome in Torson Slo. He's partner and chief economist at Apollo. He's here with us at Post Nights.Good to see you. Welcome to our program. >> Thanks for having me.>> What does pretend Fed President Sllo do in September. What would your vote be. >> Well, the challenge here is that the dual mandate is of course very torn.On the one hand, inflation is going up as we saw in the PPI data. And when inflation is going up, the Fed should be hiking. On the other hand, the employment report for July was v ...

Monetary Policy - Federal Reserve Bank of Chicago President Austan Goolsbee wants to see at least one more inflation report to ensure persistent price pressures are not increasing [1]

Politics & Governance - Gavin Newsom and California are challenging Donald Trump's attempts to rig congressional districts, advocating for democratic processes against perceived Republican gerrymandering [4][11][12][13][14][15][16][17][18][22][23][24][25][28][30] - The report highlights the contrast between Democratic and Republican approaches to governance, particularly regarding transparency and accountability, referencing the Epstein files [7][8][9] - California's redistricting process is presented as a transparent and public alternative to alleged backroom deals in other states [23] Economics & Policy - Donald Trump's economic policies, including tariffs, are criticized for leading to higher prices and inflation, impacting consumers and seniors [52][53][57][58][60][61][64][65] - The report discusses the potential conflict of interest involving Treasury Secretary Scott Bessant and his soybean farmland in North Dakota, raising concerns about trade negotiations with China [78][79][80][81][82][83][84][85][86][87][88][89] - Social Security is highlighted as a crucial anti-poverty program, with concerns raised about potential Republican efforts to cut Medicaid by 900 billion, Medicare by 500 billion, and the Affordable Care Act by 300 billion [38][39][40][41][44][46][47][48][49][50][51] International Relations - Donald Trump's approach to the war in Ukraine is criticized, with claims that he has failed to solve the conflict and is aligning with Vladimir Putin's position [65][66][67][68][69][70][71][72][73][74][75][76] - Vladimir Putin is seen as gaining from meetings with Donald Trump, potentially normalizing relations and changing the subject away from Ukraine [73][74][75][76] Social Issues - The report emphasizes the importance of protecting vulnerable communities and addressing issues such as healthcare and deportation [34][36] - The legacy of Franklin Delano Roosevelt and the Social Security Act is celebrated, highlighting the importance of economic security and social safety nets [38][39][40][41][44][45]

inflation was higher than expectedtherefore I will sell the only asset designed to hedge against inflation— crypto r. mfers ...

Social Media Activity - Coinbase's Instagram content features turtles discussing inflation [1]

Market Sentiment & Fed Policy - The stock market's record-setting run is heavily reliant on the Federal Reserve cutting interest rates in the fall [1] - Despite a hot PPI print, the stock market remained relatively flat, suggesting investors bought the dip [2] - The worst-case scenario for investors is the Fed hiking interest rates; a neutral stance could be seen as positive, indicating the economy can withstand current rates [4] - A 25 or 50 basis point cut by the Fed to normalize real interest rates could be positive for stocks [5] - The conversation has shifted from a 25 or 50 basis point cut to a 25 basis point cut or no cut at all [6] - The economy appears to be holding up under the current interest rates, even though the Fed's policy rates are higher compared to the rest of the world [7] - A 25 basis point cut could be perceived as hawkish if the Fed signals a "wait and see" approach [8] Investor Positioning - Many investors are positioned for a pickup in inflation and were expecting a hot PPI number, which is why the market reaction was muted [8][9]

Market Trends & Concerns - Stocks experienced losses due to inflation report, raising concerns about tariffs' economic impact [1]

Inflation Analysis - President Trump states there is "hardly any inflation at all" [1] - The statement is considered bullish by some [1] Market Sentiment - The tweet expresses a positive outlook on the market [1]